AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON AUGUST 8, 2000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------------------------------------
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------------------------------------------
PVAXX CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
COLORADO 05-0499528
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL CLASSIFICATION IDENTIFICATION NO.)
INCORPORATION OR CODE NUMBER)
ORGANIZATION
</TABLE>
PVAXX CORPORATION
12730 New Brittany Boulevard
Ft. Myers, Florida 33907
941-274-9355
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
NADEAU & SIMMONS, P.C.
1250 TURKS HEAD BUILDING
PROVIDENCE, RHODE ISLAND 02903
<PAGE> 1
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
WITH COPIES TO:
BERSCH ACCOUNTING, SC
633 W. WISCONSIN AVENUE
SUITE 610
MILWAUKEE, WI 53203
414-272-8800
APPROXIMATE DATE OF COMMENCEMENT OF
PROPOSED SALE TO THE PUBLIC:
As soon as practicable after approval.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, as amended (the "Securities Act"), check the following box. [X]
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement number for the same offering. [ ] ________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ] _________________
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ] ________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ] _________________
<PAGE> 2
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
Disclosure alternative used (check one):
Alternative 1 ( ) Alternative 2 (X)
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CALCULATION OF REGISTRATION FEE
Proposed(1)(2) Proposed(2)(3)
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered(1) Registered(2) Per Share(2) Price Fee (3)
------------- ------------- ------------- ------------ -------------
COMMON STOCK 21,322,800 $ .001 $ 21,322 $ 7.24
COMMON STOCK 2,400,000 $ 1.000 $ 2,400,000 $ 827.58
(1) The shares registered hereunder are shares of our common stock, no par
value.
(2) Estimated for purpose of calculating the registration fee.
This offering registers certain shares previously issued. The
securities may be sold at their market price on the Over-the-Counter
Electronic Bulletin Board when sold. Accordingly, the registration fee
has been calculated in accordance with Rule 457(f)2 of the Securities
Act and based upon certain shares of common stock.
This offering also registers common shares yet to be sold, pursuant to
Rule 415. The securities may be sold at their market price on the
Over-the-Counter Electronic Bulletin Board when sold. Accordingly, the
registration fee has been calculated in accordance with Rule 457(c) of
the Securities Act and based upon $1.00.
(3) The fee with respect to these shares has been calculated pursuant
to Rules 457(f) and 457(c) under the Securities Act of 1933, as
amended, and based upon the book value of our common stock on a date
within five (5) days prior to the date of filing of this registration
statement (since no quote is now published, it was assumed at $0.001
for purposes only of calculating the filing fee).
<PAGE> 3
------------------------------------------------------------------------------
The information contained in this prospectus is subject to completion or
amendment. The shares described in this prospectus may not be sold, nor
may offers to buy be accepted, prior to the time this registration
statement becomes effective. This prospectus shall not constitute an offer
to sell or the solicitation of an offer to buy, nor shall there be any sale
of these securities in any state in which such offer, solicitation or sale
would be unlawful, prior to registration under the securities laws of any
such state.
<PAGE> 4
We will amend this registration statement on such date or dates as may be
necessary to delay its effective date until we shall file a further
amendment which specifically states that this registration statement shall
become effective in accordance with Section 8(A) of the Securities Act of
1933 or until the registration statement shall become effective on such
date as the Commission, acting pursuant to said Section 8(a), may
determine.
Subject to Completion Dated ______________, 2000
PVAXX CORPORATION
23,722,800 shares
Common Stock
This prospectus relates to up to 23,722,800 shares of common stock, no par
value of PVAXX Corporation. Our corporate address is 12730 New Brittany
Boulevard, Ft. Myers, Florida 33907. All of the shares offered are to be
sold for the accounts of selling shareholders of our Company. We will not
receive any of the proceeds from the sale of the shares by our selling
shareholders. We estimate that total expenses will be approximately
$75,000 in connection with this offering of our shares.
We are subject to the reporting requirements of Section 13 and 15(d) of the
Exchange Act and are presently current in filing reports with the
Securities and Exchange Commission.
Investments in our shares involve a high degree of risk (see "Risk
Factors"). The shares have not been approved or disapproved by the
Securities and Exchange Commission nor has the Commission passed upon the
accuracy or adequacy of this prospectus. Any representation to the
contrary is a criminal offense.
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
<S> <C>
Prospectus Summary
Risk Factors
Year 2000 Problems May Have an Adverse Effect
Competition
Potential Fluctuations in Quarterly Operating Results
Limited Operating History
Dependence on Third-Party Suppliers
Patents, Trademarks and Proprietary Information
Rapid Technological Changes
Expansion
Government Regulation
Dependence on Key Personnel
Control by Principal Shareholders, Officers and Directors
Issuance of Preferred Stock
Trading Market; Volatility of Stock Price
Possible Need for Additional Financing
Indemnification of Officers and Directors
Dependence Upon Outside Advisors
Rule 144 Sales
Use of Proceeds
Dilution
Dividend Policy
Business
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Management
Certain Transactions
Principal Shareholders
Description of Capital Stock
Plan of Distribution
Legal Matters
Experts
Additional Information
Financial Statements F-1
</TABLE>
<PAGE> 6
PART I
NARRATIVE INFORMATION REQUIRED IN PROSPECTUS
Inside Front and Outside Back Cover Pages
See front and back cover pages of this prospectus.
PROSPECTUS SUMMARY
The following summary should be read in conjunction with the more detailed
information and the financial statements.
THE COMPANY
PVAXX CORPORATION ("PVAXX" or the "Company") was incorporated as a Florida
corporation on March 16, 2000. Pvaxx Corporation, is the parent company of
the Pvaxx group of companies.
The Pvaxx group consists of Pvaxx Technologies Ltd, which holds the patents
and intellectual property. Pvaxx Research & Development Ltd, the company
undertaking all ongoing trials and developments, which also does business
as Pvaxx Engineering, which manufactures all our pelleting machines and
Pvaxx Pharmaceutical which manufactures and supplies capsule making
machinery. Pvaxx Europe) Ltd is the European sales company of the group.
Pvaxx has just taken possession of a newly built European HQ in England
near Malmesbury in Wiltshire, which includes 3000sqft sales offices,
2000sqft engineering, 2000sqft development labs, 4000sqft manufacturing
areas.
Pvaxx is a completely biodegradable polymer. We believe PVAXX represents a
genuine advance in polymer technology. Management feels that Pvaxx will be
a major contributor to the reduction in the environmental and ecological
impact of plastics. PVAXX offers the potential of practical solutions to
worldwide waste disposal problems, as all products manufactured from Pvaxx
biodegrade into non-toxic elements when disposed of through water immersion
or in landfill.
Pvaxx is a newly formulated polymer, created by a patented process and
manufactured from the chemical raw material Polyvinyl Alcohol 'pva' and
other food-grade additives, which have been used in consumer markets for
over 25 years. Thus its properties, both physical and toxicological, as
well as its environmental impact from its bio-degradation on disposal have
been studied in depth.
<PAGE> 7
SELECTED PROFORMA FINANCIAL DATA
The following table sets forth our projected income statement for the first
four fiscal years following the closing of our anticipated equity offering.
The financial forecasts presented herein have been prepared on the basis of
an January 1 to January 1 fiscal year to reflect our predicted operating
results for the twelve month fiscal period following the completion of an
anticipated equity offering.
12 MONTH FISCAL PERIOD FOLLOWING FUNDING
PROFORMA INCOME STATEMENT DATA
(IN 000S)
CALENDAR YEAR ENDING DECEMBER 31.
Yr. 1 Yr. 2 Yr. 3 Yr. 4
(1/0-12/00) (1/01-12/01) (1/02-12/02) (1/03-12/03)
Revenue $12,000,000 24,000,000 24,000,000 24,000,000
Cost of Sales $10,378,714 19,333,178 19,333,178 19,333,178
EBITDA $1,621,286 4,666,822 4,666,822 4,666,822
EBITDA Margin 13.51% 19.45% 19.45% 19.45%
Net Income $1,158,150 3,284,213 3,279,584 3,276,584
Proforma Balance Sheet Data (as of 03/31)
Current Assets $
Total Assets $
Current Liabilities $
Long Term Debt $
Stockholders Equity $
Our corporate headquarters are located at 12730 New Brittany Boulevard, Ft.
Myers, Florida 33907, (941) 274-9355. Our transfer agent is Nadeau &
Simmons, P.C., 1250 Turks Head Building, Providence, Rhode Island 02903,
(401) 272-5800.
THE OFFERING
The offering to which this prospectus relates consists of 23,722,800 shares
of our common stock.
<PAGE> 8
RISK FACTORS
The shares offered hereby are speculative and involve a high degree of risk
and should not be purchased by investors who cannot afford the loss of
their entire investment.
FORWARD-LOOKING INFORMATION
In passing the Private Securities Litigation Reform Act of 1995 (the
"Reform Act"), Congress encouraged public companies to make "forward
looking statements" by creating a safe harbor to protect companies from
securities law liability in connection with forward looking statements. We
intend to qualify both our written and oral forward looking statements for
protection under the Reform Act and any other similar safe harbor
provisions.
Generally, forward looking statements include expressed expectations of
future events and the assumptions on which the expressed expectations are
based. All forward looking statements are inherently uncertain as they are
based on various expectations and assumptions concerning future events and
they are subject to numerous known and unknown risks and uncertainties
which could cause actual events or results to differ materially from those
projected. Due to those uncertainties and risks, the investment community
is urged not to place undue reliance on our written or oral forward looking
statements. We undertake no obligation to update or revise our for forward
looking statements to reflect future developments. In addition, we
undertake no obligation to update or revise forward looking statements to
reflect changed assumptions, the occurrence of unanticipated events or
changes to future operating results over time.
We provide the following risk factor disclosure in connection with our
continuing effort to qualify our written and oral forward looking
statements for the safe harbor protection of the Reform Act and any other
similar safe harbor provisions. Important factors currently known to us
that could cause actual results to differ materially from those in forward
looking statements include the following disclosures:
COMPETITION
The biodegradable plastics industry in which the Company operates is highly
competitive. Some of the company's principal competitors in certain
business lines are substantially larger and better capitalized than the
Company. Because of these resources, these companies may be better able
than the Company to obtain new customers and to pursue new business
opportunities or to survive periods of industry consolidation.
POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS
Our business and prospects must be considered in light of the risks,
expenses and difficulties frequently encountered by companies in their
early stage of development. Such risks for our company include, but are
not limited to, an evolving and unpredictable business model, management of
<PAGE> 9
growth, our ability to anticipate and adapt to a developing market and
unforeseen changes and developments in our strategic partners' activities
and direction. To address these risks, we must, among other things,
implement and successfully execute our business strategy, continue to
develop and upgrade our technology, provide superior products, respond to
competitive developments and attract, retain and motivate qualified
personnel and meet the expectations of our strategic partners. There can be
no assurance that we will be successful in addressing such risks, and the
failure to do so could have a material adverse effect on our business,
prospects, financial condition and results of operations.
LIMITED OPERATING HISTORY
As a result of our limited operating history and the emerging nature of the
markets in which we compete, our company may not be able to accurately
predict its revenues. We expect to experience significant fluctuations in
our future quarterly operating results due to a variety of factors, many of
which are outside our control. Factors that may adversely affect our
quarterly operating results include (i) our ability to attract and retain
clients, (ii) the level of competition in the biodegradable plastic
industry, (iii) our ability to upgrade and develop our systems and
infrastructure and attract new personnel in a timely and effective manner,
(iv) the amount and timing of operating costs and capital expenditures
relating to expansion of our business, operations and infrastructure, (v)
governmental regulation, and (vi) general economic conditions and economic
conditions specific to the biodegradable plastic industry.
PATENTS, TRADEMARKS AND PROPRIETARY INFORMATION
We may apply for United States patents related to our business. In
addition, we have applied for trademark protection in the United States for
the name PVAXX CORPORATION. There can be no assurance as to the breadth or
degree of protection which existing or future patents or trademarks, if
any, may afford us, that any patent or trademark applications will result
in issued patents or trademarks, that our patents or trademarks will be
upheld, if challenged, or that competitors will not develop similar or
superior methods or products outside the protection of any patent issued to
us. Although we believe that our potential patent and trademarks and our
products do not and will not infringe patents or trademarks or violate the
proprietary rights of others, it is possible that our existing patent or
trademark rights may not be valid or that infringement of existing or
future patents, trademarks or proprietary rights may occur. Failure to do
any of the foregoing could have a material adverse effect upon our company.
In addition, there can be no assurance that we will have the financial or
other resources necessary to enforce or defend a patent or trademark
infringement or proprietary rights violation action which may be brought
against us. Moreover, if our products infringe on patents, trademarks or
proprietary rights of others, we could, under certain circumstances, become
liable for damages, which also could have a material adverse effect on our
company.
<PAGE> 10
EXPANSION
Our proposed expansion will also require the implementation of enhanced
operational and financial systems and will require additional management,
operational and financial resources. Failure to implement these systems and
add these resources could have a material adverse effect on our results of
operations and financial condition. There can be no assurance that we will
be able to manage our expanding operations effectively or that we will be
able to maintain or accelerate our growth. In addition, there can be no
assurance of the viability of our products in new geographic regions or
particular local markets.
GOVERNMENT REGULATION
We must comply with state laws and a wide range of other state and local
rules and regulations applicable to our businesses. Continued compliance
with this broad federal, state and local regulatory network is essential
and costly, and the failure to comply could have a material adverse effect
on our Company. Violations of laws and/or state laws and regulations
governing substantive aspects of doing business in a particular state could
subject us and our affiliates to rescission offers, monetary damages,
penalties, imprisonment and/or injunctive proceedings.
DEPENDENCE ON KEY PERSONNEL
Our future success depends in large on part of the continued service of our
key marketing and management personnel and on our ability to continue to
attract and retain qualified employees. The competition for such personnel
is intense, and the loss of key employees could have a material effect on
the our financial condition and results of operations.
CONTROL BY PRINCIPAL SHAREHOLDERS, OFFICERS AND DIRECTORS
Our principal shareholders, officers and directors will beneficially own
approximately eighty percent (80%) of our company's common stock. As a
result, such persons may have the ability to control our company and direct
its affairs and business. Such concentration of ownership may also have
the effect of delaying, deferring or preventing change in control of our
company.
ISSUANCE OF PREFERRED STOCK MAY ADVERSELY AFFECT HOLDERS OF
COMMON STOCK OR DELAY OR PREVENT CORPORATE TAKE-OVER
Our Articles of Incorporation provide that preferred stock may be issued
from time to time in one or more series. The Board of Directors is
authorized to determine the rights, preferences, privileges and
restrictions granted to and imposed upon any wholly unissued series of
preferred stock and the designation of any such shares, without any vote or
action by our shareholders. The Board of Directors may authorize and issue
Preferred stock with voting power or other rights that could adversely
affect the voting power or other rights of our holders of common stock. In
addition, the issuance of preferred stock could have the effect of
delaying, deferring or preventing a change in control of our company,
<PAGE> 11
because the terms of preferred stock that might be issued could potentially
prohibit our company's consummation of any merger, reorganization, sale of
substantially all of its assets, liquidation or other extraordinary
corporate transaction without the approval of our holders of the
outstanding shares of the preferred stock.
TRADING MARKET; POTENTIAL VOLATILITY OF STOCK PRICE
There has been no trading market for our common stock, and there can be no
assurance that an active trading market will develop or be sustained. At a
future date, provided a public market for the stock does develop, the
market price of the shares of our common stock is likely to be highly
volatile and may be significantly affected by factors such as fluctuations
in our operating results, announcements of technological innovations or new
products and/or services by our company or its competitors, governmental
regulatory action, developments with respect to patents or proprietary
rights and general market conditions. In addition, the stock market has
from time-to-time experienced significant price and volume fluctuations
that are unrelated to the operating performance of particular companies.
POSSIBLE NEED FOR ADDITIONAL FINANCING
The ultimate success of our company may depend upon our ability to raise
additional capital. We are currently investigating the availability,
source, or terms that might govern the acquisition of additional capital.
If additional capital continues to be needed, there is no assurance that
funds will be available from any source or, if available, that they can be
obtained on terms acceptable to our company. If not available, our
operations will be limited to those that can be financed with its modest
capital.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Our Articles of Incorporation provide for the indemnification of our
directors, officers, employees, and agents, under certain circumstances,
against attorney's fees and other expenses incurred by them in any
litigation to which they become a party arising from their association with
or activities on behalf of our company. We will also bear the expenses of
such litigation for any of our directors, officers, employees, or agents,
upon such person's promise to repay us therefor if it is ultimately
determined that any such person shall not have been entitled to
indemnification. This indemnification policy could result in substantial
expenditures by our company which it will be unable to recoup.
DEPENDENCE UPON OUTSIDE ADVISORS
To supplement the business experience of our officers and directors, we may
be required to employ consultants or advisors. It is anticipated that such
persons may be engaged on an "as needed" basis without a continuing
fiduciary or other obligation to our company.
<PAGE> 12
RULE 144 SALES
Certain of the outstanding shares of common stock held by our present
stockholders are "restricted securities" within the meaning of Rule 144
under the Securities Act of 1933, as amended.
As restricted shares, these shares may be resold only pursuant to an
effective registration statement or under the requirements of Rule 144 or
other applicable exemptions from registration under the Act and as required
under applicable state securities laws. Rule 144 provides in essence that
a person who has held restricted securities for a prescribed period may,
under certain conditions, sell every three months, in brokerage
transactions, a number of shares that does not exceed the greater of 1.0%
of a company's outstanding common stock or the average weekly trading
volume during the four calendar weeks prior to the sale.
As a result of revisions to Rule 144 which became effective on or about
April 29, 1997, there will be no limit on the amount of restricted
securities that may be sold by a nonaffiliate after the restricted
securities have been held by the owner for a period of two years. A sale
under Rule 144 or under any other exemption from the Act, if available, or
pursuant to subsequent registrations of shares of common stock of our
present stockholders, may have a depressive effect upon the price of our
common stock in any market that may develop.
FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts of assets and liabilities
and disclosures of contingent assets and liabilities at the date of the
financial statements, as well as the reported amounts of revenues and
expenses during the reporting period. Amounts affected by these estimates
include, but are not limited to, the estimated useful lives, related
amortization expense and carrying values of our intangible assets and
capitalized research and development costs.
Changes in the status of certain matters or facts or circumstances
underlying these estimates could result in material changes to these
estimates, and actual results could differ from these estimates.
DISCLOSURE RELATING TO LOW-PRICED STOCKS
As long as the trading price of our common stock is less than US$5.00 per
share, trading in our common stock in the US secondary market is subject to
certain rules promulgated under the Securities Exchange Act of 1934, which
rules require additional disclosure by broker-dealers in connection with
any trades involving a stock defined as a "penny stock" (generally, any
non-NASDAQ equity security that has a market price of less than US$5.00 per
share, subject to certain exceptions). Such rules require the delivery,
prior to any penny stock transaction, of a disclosure schedule explaining
<PAGE> 13
the penny stock market and the risks associated therewith, and impose
various sales practice requirements on broker-dealers who sell penny stocks
to persons other than established customers and accredited investors. For
these types of transactions, the broker-dealer must make a special
suitability determination for the purchaser and have received the
purchaser's written consent to the transactions prior to sale. The
additional burdens imposed upon broker-dealers by such requirements may
discourage broker-dealers from effecting transactions in our common stock,
which could severely limit the market liquidity of our common stock and the
ability of our stockholders to sell our common stock in the US secondary
market.
USE OF PROCEEDS
Our company may realize a portion of the proceeds of this offering.
DETERMINATION OF OFFERING PRICE
This offering registers shares previously sold. The shares may eventually
be sold at their fair market value on the Over-the-Counter Electronic
Bulletin Board when sold. Accordingly, the registration fee has been
calculated in accordance with Rule 457(c) and (f) of the Securities Act and
based upon certain shares of our common stock. There has been no public
trading market for our common stock as of July 31, 2000.
CAPITALIZATION
The following is the capitalization of our company as of July 31, 2000.
<TABLE>
<CAPTION>
AMOUNT TO BE
AMOUNT AMOUNT OUTSTAND. UPON
TITLE OF CLASS AUTHORIZ. OUTSTAND. ISSUANCE OF ALL
SHARES
-------------- ------------ ---------- -----------------
<S> <C> <C> <C>
Common Stock,
no par value 40,000,000 21,322,800 23,722,800
Preferred Stock 10,000,000 10,000,000 10,000,000
</TABLE>
<PAGE> 14
DILUTION
Our company's shareholders will not realize any dilution from this
offering.
SELLING SHAREHOLDERS
The Offering
This offering registers certain shares previously sold. The securities may
be sold at their market price on the Over-the-Counter Electronic Bulletin
Board when sold. Accordingly, the registration fee has been calculated in
accordance with Rule 457(f) of the Securities Act and based upon certain
shares of common stock was $0.001.
This offering also registers common shares yet to be sold, pursuant to Rule
415. The securities may be sold at their market price on the Over-the-Counter
Electronic Bulletin Board when sold. Accordingly, the registration fee has been
calculated in accordance with Rule 457(c) of the Securities Act and based upon
$1.00.
An aggregate of up to 21,322,800 shares of our company's common stock, no
par value per share, may be offered by our selling shareholders who had
previously been issued "restricted" shares by our company and who will be
entitled to sell up to 21,322,800 shares of our company's common stock
offered by this prospectus.
The following table sets forth certain information with respect to our selling
shareholders, persons or entities for whom our company is registering for resale
to the public, either the shares of our company's common stock which such
persons or entities own.
The following table reflects such person's or entities' ownership as of
July 31, 2000.
<PAGE> 15
<TABLE>
<CAPTION>
MAXIMUM
CERT NO. NUMBER TO
NAME OF OWNER & CLASS BE SOLD
------------------------ -------------- -----------------
<S> <C> <C>
Rule 415 Shelf Registration Common 2,400,000
British Traders and Shippers Ltd 10*restricted 20,000
David Bromige 35 4,000
Christopher Bence 63 7,687
Joy Chapman 29 2,000
Grahame Chapman 43 4,000
Kerry & Jutta Drew 5 115,200
John Dickie Dawson 14 5,752
John Dawson 60 1,738
Michael Edgeworth 74 4,000
Mr & Mrs. AP Evans 32 6,000
Thomas Edgeworth 36 6,000
Michael Edgeworth 54 2,000
Mr AP Evans 71 2,400
Thomas Edgeworth 73 2,000
WJ & SE Freebury 3 440,000
Kate Freebury 25 5,000
<PAGE> 16
William & Sandra Freebury 66 60,000
Philip Herbert 58 26,478
Gregory Abraham C79 1,429
Anthony & Denise Amodio C96 2,000
Roy & Sharon Buchanan C10A 1,000
Gary L Baxley & Karen B Baxley C99 500
Lewis Boltic & Karen Baxley C101 286
Joseph Cassata C109 200
Brian & Jo Ann Carr C102 100
Robin Mary Coe C112 500
Frank & Kathy D'Ascoli C114 300
Robert F. & Lynette W. Fox C106 100
Elli & Monty Grim C82 750
Louis & Patricia Goudy C91 300
Gayle & Sheliea Gave C120 100
John Hardacre 23 1,880
Matthew Hall 11 4,400
James Hart 15 6,000
Philip Herbert 16 40,000
Malcom Heaven 19 3,760
Barbara Hale 38 2,000
<PAGE> 17
H.F. Hart 44 2,000
H.F & R. L. Hart 45 4,000
Geoffrey Hester 52 2,000
Matthew Hall 57 25,600
Nelson Jerram 28 10,000
Bernard Jones 39 8,000
Alan Jones 62 12,000
Jumik Investments, Inc. 123 16,613,815
David Kear 20 2,820
Noel Kiernans 64 24,000
Ilya Kazi 76 4,000
Larry Lipman 6 90,000
Richard Lacey 33 2,000
Diane Lacey 34 2,000
Raymond Lagden 37 2,000
Richard Lacey 72 2,000
Peter Morris 7 20,000
Jeffrey Meaton 46 2,000
Melvyn Miles 49 8,000
Pat Mills 55 2,000
Michael & Wendy Moulder 68 20,000
Nidicus Foundation 9 2,000,000
<PAGE> 18
John Nixon 13 20,000
William Nigel-Jones 41 4,000
Alan & Linda Harris C119 429
Scott T. Johnson C87 150
Laurilyn Johnson C88 150
Jerry & Joanie Jordan C107 300
Bryan & Rhonda Keane C86 460
Nancee Kane C89 100
C.K. Koehler & S.J. Koehler C98 4,000
Jerry Krecicki, Jr. C118 400
The Lotz Trust, John V. Lotz C92 6,000
Paul & Margaret Lotz C94 4,000
Allen McClain C111 1,000
Terry W.. McGee &
Peggy H. McGee C93 3,000
Glenn A Morton &
Francis Morton C95 2,000
Raymond Malone C97 300
Thomas L. Morgan &
Jacqualine P. Morgan C105 1,000
David & Peggy Newlan C83 300
Oilve Overthrow 30 2,000
John CM O'Doherty 65 24,000
<PAGE> 19
Martin Reeves 67 14,000
Howard Ramsden 21 2,820
David Roffe 24 20,000
Martin Reeves 40 14,000
Jane Stevens 48 4,000
Clare Stevens 47 2,000
Henry Stevens 1 10,000
Yolanda Stevens 2 10,000
K.G. & M.L. Stevens 4 50,000
Karl Sinnott 17*restricted 40,000
Darrell Smith 42 8,000
Rob & Sandra Thomson 8 36,000
Wendy Thomson 69 2,000
Joseph Tunna 77 2,000
Kevin Thomas 53 2,000
Stephanie Sowden 122 8,570
Ashley Walters 31 4,000
Graham Wilden 22 1,128
Kevin Watkins 70 4,000
Danny Wilcox 121 5,800
John Young 51 2,000
<PAGE> 20
Daniel Young & Sarah Garrath 56 2,000
Michael Stevens 50 4,000
H. Stevens 27 10,000
Amanda Stevens 26 10,000
Adam Smith 75 2,000
Ethel & Michael Onge C85 1,000
Kevin & Catherine Reynolds C117 2,858
Raymond Reynolds C81 1,000
Richard Reynolds C80 1,000
Jacquelin Risley & Gerald Stream C110 30
Brian & Stacey Reis C115 2,000
Diane R. Smith C84 160
James Schneider C90 30
John W. Stambaugh in Trust for
Jacqueline M. Canova C100 100
Carmie L Scarfone &
Claudia Scarfone C103 500
Peter G. Wittke C113 1,500
Tommy & Janie Wiley C108 1,000
Gerard Werner
C/O Zenith Holdings
P.O. Box 216
Kohler, WI 53044 200,000
<PAGE> 21
Christopher O. Werner 200,000
2620 North 40{th} Street
Sheboygan, WI 53083
Zenith Holdings Ltd. 200,000
P.O. Box 216
Kohler, WI 53044
Mark T. Thatcher
125 Gideon Lawton Lane
Portsmouth, RI 02871 200,000
Richard Nadeau, Jr.
1250 Turks Head Building
Providence, RI 02903 200,000
James R. Simmons
1250 Turks Head Building
Providence, RI 02903 200,000
Elisabeth Alofsin
C/O Peter J. Alofsin
275 Promenade Street,
Ste. 300
Providence RI 02908 500
Peter J. Alofsin
275 Promenade Street,
Ste. 300
Providence RI 02908 500
Timothy Alsheimer
Four Winds Bellevue Ave
Newport RI 02840 100
Vince Arcello
651 W. Main Rd.
Middletown RI 02842 100
Terry Badger
85 Summer Street
Oakland ME 04963 500
<PAGE> 22
Mark Beall
12790 Atlantic Avenue
Lakewood, CO 80228 500
David Donner
51 Marland Road
Colorado Springs, CO 80906 1,000
Meredith Donner
51 Marland Road
Colorado Springs, CO 80906 1,000
Robert J. Beuchler
The Principal Group
102 S. Tejon Street,
Ste. 300
Colorado Springs CO 80903 500
David J. Binkowski
Bink, Inc.
3808 South Sherman Street
Englewood CO 80110 500
Thomas H. Blaney II
201 Line Road
Bellemead NJ 08502 100
Robert Borday
4 Wolcott Avenue
Jamestown RI 02835 100
Thomas Darrell Carico
C/O Ricky D. Wolfe
322 Savannah Ave.
Statesboro GA 30458 2,000
John H. Cox
The Provident
5613 DTC Parkway, Ste. 150
Englewood CO 80111 500
<PAGE> 23
Michael L. Ebert
Ebert & Rehorn
4455 E. Camelback, Ste. E-180
Phoenix AZ 85018 500
Charles Ellsworth
1158 Eudora Street
Denver CO 80209 500
Jack W. Eversull
The Eversull Group
5728 LBJ Freeway,
Ste. 200
Dallas TX 75240 100
Arthur Frank
30 Mongenais St.
Providence RI 02909 100
Amy Hand
2965 S. Williams
Denver CO 80210 500
David Hand
2965 S. Williams
Denver CO 80210 500
Craig Hart
7014 E. Camelback Rd.
No. 580
Scottsdale AZ 85251 100
Margaret Heath
357 Harris Hill Rd.
Poland ME 04274 500
Don Hejmanowski
2013 Torwood Circle
Plainfield IL 60544 100
<PAGE> 23
Constance Holland
P.O. Box 250
Mystic, CT 3,000
Chuck Holland
245 Taragona Way
Daytona Beach, FL 3,000
Roger Huglion
255 W. 84th St. Apt. 3B
New York NY 10024 100
James W. Johnson
1225 E. Commodore Place
Tempe AZ 85283 500
Robert B. Johnson
California Federal
1225 E. Commodore Place
Tempe AZ 85283 500
Ning Luh
12925 Creamery Hill Drive
Germantown MD 20874 100
Pasquale Maiorino
c/o Platz Associates
Two Great Falls Plaza
Auburn ME 04210 2,000
Steven Merrell
C/O Lewis F. Merrell
3313 Riley
Plano TX 75025 500
Amanda Merrell
C/O Lewis F. Merrell
3313 Riley
Plano TX 75025 500
<PAGE> 25
Matthew Merrell
C/O Lewis F. Merrell
3313 Riley
Plano TX 75025 500
Lewis F. Merrell
3313 Riley
Plano TX 75025 4,400
Joyce Merrell
3313 Riley
Plano TX 75025 4,400
Lane G. Neville
3300 N. Central, Ste. 750
Phoenix AZ 85012 500
Hunter Pell
C/O Lewis F. Merrell
3313 Riley
Plano TX 75025 500
Jessica Pell
C/O Lewis F. Merrell
3313 Riley
Plano TX 75025 500
Peter Pescosolido
374 Commonwealth Rd.
Wayland MA 01778 1,000
John Petruney
66 Haskell St.
Beverly Farms MA 01915 100
Michael G. Pfalmer
Rampart Distribution
Colorado Springs CO 80909 500
Thomas Platz
c/o Platz Associates
Two Great Falls Plaza
Auburn ME 04210 2,000
<PAGE> 26
Dyer Powell
R.J. Steichen Securities
10 Division Arcade
Buffalo MN 55313 500
Paul Raducha
Exercycle Corporation
667 Providence Street
Woonsocket RI 02895 100
Richard Reavis
651 W. Main Rd.
Middletown RI 02842 100
Jeff Revious
761 Garfield
Denver CO 80206 500
Romeo Rubitaille
53 Slade St.
Pawtucket RI 02688 100
Jack Santos
466 Great Rd.
Lincoln RI 02865 100
James R. Simmons
Nadeau & Simmons
1250 Turks Head Building
Providence RI 02903 1,000
Amy Simmons
C/O Jim Simmons
1250 Turks Head Building
Providence RI 02903 1,000
Andy Small
39 School St.
Newport RI 02840 100
David Smith
3 Restmere Terrace
Middletown RI 02842 100
<PAGE> 27
Glen Smith
1 Sunset Hill RD.
Middletown RI 02842 100
Sean Sullivan
7 Colonial Dr.
Middletown RI 02840 100
Stephanie Thatcher
C/O Thomas S. Thatcher
2321 Juniper Lane
Amarillo TX 79109 500
Steven B. Thatcher
85 Newbury Street
Boston MA 02116 500
Michael T. Thatcher
C/O John J. Wallace, Jr.
17 W. Cheyenne Mtn. Blvd.
Colorado Springs CO 80906 500
Seth T. Thatcher
C/O Thomas S. Thatcher
2321 Juniper Lane
Amarillo TX 79109 500
JoAnn Thatcher
2321 Juniper Lane
Amarillo TX 79109 1,000
Thomas S. Thatcher
2321 Juniper Lane
Amarillo TX 79109 1,000
Mills T. Thatcher
125 Gideon Lawton Lane
Portsmouth RI 02871 5,000
Grayson S. Thatcher
125 Gideon Lawton Lane
Portsmouth RI 02871 5,350
<PAGE> 28
Jennifer M. Thatcher
125 Gideon Lawton Lane
Portsmouth RI 02871 6,000
Meredith Wallace
17 W. Cheyenne Mtn. Blvd.
Colorado Springs CO 80906 4,400
John J. Wallace, Jr.
17 W. Cheyenne Mtn. Blvd.
Colorado Springs CO 80906 4,400
Jay Weibel
29 Bowens Wharf
Newport RI 02840 600
Johanna Werner
2123 Stanford Avenue
St. Paul MN 55105 3,000
Patrick J. Werner
903 St. Clair
St. Paul MN 53105 3,000
Anthony M. Werner
3701 E. Cactus Creek Court
Highlands Ranch CO 80126 3,000
Kevin Werner
3175 Limerick Lane
Sheboygan WI 53080 5,000
Mary Belle Werner
2620 N. 40th Street
Sheboygan, WI 53083 6,300
Christopher Anthony Werner
P.O. Box 216
Kohler, WI 53083 10,500
<PAGE> 29
Mary Elizabeth Werner
P.O. Box 216
Kohler, WI 53083 10,850
Paula Werner-Kletzein
2026 N. 6th Street
Sheboygan WI 53083 3,000
Gretchen Werner-Schuttey
9704 Old Barn Rd.
Meqoun WI 53072 3,000
Adeline Wolfe
322 Savannah Avenue
Statesboro GA 30458 1,000
Grant Wolfe
322 Savannah Avenue
Statesboro GA 30458 1,000
Ricky D. Wolfe
322 Savannah Avenue
Statesboro GA 30458 2,000
Camille Wolfe
322 Savannah Avenue
Statesboro GA 30458 2,000
TOTALS 23,722,800
</TABLE>
<PAGE> 30
PLAN OF DISTRIBUTION
The shares of our common stock registered hereunder may be sold, if
desired, by our selling shareholders, subsequent to a registered
broker/dealer establishing an automated quotation on the Over-the-Counter
Bulletin Board.
The selling shareholders= shares must be offered: (i) through dealers or in
ordinary brokers' transactions, in the over-the-counter market or
otherwise; (ii) at the market or through market makers or into an existing
market for the securities; or (iii) in other ways not involving market
makers or established trading markets, including direct sales to purchasers
or effective through agents, or (iv) in combinations of any of such methods
of sale. The shares will be sold at market prices prevailing at the time of
sale or at negotiated prices.
If a dealer is utilized in the sale of the shares in respect of which our
prospectus is delivered, the selling shareholder will sell such shares to
the dealer, as principal. The dealer may then resell such shares to the
public at varying prices to be determined by such dealer at the time of
resale.
Sales of our shares "at the market" and not at a final price, which are
made into an existing market for the shares, will be made by our selling
shareholders to or through a market maker, acting as principal or as agent.
Other sales may be made, directly or through an agent, to purchasers
outside existing trading markets. A selling broker may act as agent or may
acquire the shares or interests therein as principal or pledgee and may,
from time to time, effect distributions of such shares and interests.
The shares offered hereby are eligible for sale only in certain states,
and, in some of those states, may be offered or sold only to "institutional
investors", as defined under applicable state securities law. No sales or
distributions, other than as described herein, may be effected after our
prospectus shall have been appropriately amended or supplemented.
Investor Relations Arrangements
Our company may enter into an investor relations agreement. Under the
agreement, an investor relations firm is engaged to provide investor
relations, corporate communications and related support services to our
company, specifically including, among other duties, the development of a
comprehensive plan for the dissemination of our information to shareholders
as well as brokers, analysts and potential investors; advising our company
regarding trends and changes in the Over-the-Counter Bulletin Board
brokerage and investment community, as well as changes in share ownership
of our shares, all in the context of providing appropriate investor
relations communications; coordinating investor and shareholder contacts
with our counsel to ensure compliance with applicable securities laws and
exchange listing requirements; and assisting us with on-site investor
relations meetings and with the design, preparation and dissemination of
investor relations materials.
<PAGE> 31
LEGAL PROCEEDINGS
Neither our company nor any of our affiliates are a party, nor is any of
their property subject, to material pending legal proceedings or material
proceedings known to be contemplated by governmental authorities.
DIRECTORS, EXECUTIVE OFFICERS AND SENIOR MANAGEMENT
Management
The following table sets forth the ages of and positions and offices
presently held by each Director of the Company. For information about
ownership of the Company's Securities by each director, see "BENEFICIAL
OWNERSHIP OF PVAXX SECURITIES."
<TABLE>
<CAPTION>
Date First
Became Positions and Offices
Name Age Director With the Company
-------------------- ---- ---------- ---------------------------
<S> <C> <C> <C>
Henry Stevens 37 June 26, 2000 President and Director
Bryan Wade 53 June 26, 2000 Vice President, Secretary and
Director
------------------------------------------------------
Please see personal biographies at Item. 7
</TABLE>
Personal Biographies and Summary of Experience
----------------------------------------------------------------
HENRY STEVENS, PRESIDENT AND DIRECTOR
From 1979 to 1986, Mr. Stevens was the Agricultural Manager in Bisley, UK.
From there, Mr. Stevens was a design consultant in packaging development at
Deranged Design from 1987 to 1993. It was here that Mr. Stevens first
became involved with PVA polymers. He was Managing Director at Churchill
Technology (IOM) Ltd., which is a PVA technology company. He then served
as Managing Director of FIP Holdings, Ltd., which is a PVA development
company until 1997. In 1998, Mr. Stevens began serving as Managing
Director of PVAXX Group. His experience with PVA materials, particularly
in young companies, will certainly be a valuable tool in PVAXX's
development.
<PAGE> 32
BRYAN WADE, VICE PRESIDENT AND DIRECTOR
Mr. Wade has extensive sales and marketing experience, beginning in 1985,
when he served as Director of Multi-National Sales and Marketing at CFS.
Mr. Wade held similar positions in Weststar Marketing and SAS marketing
Ltd. In early 2000, Mr. Wade joined PVAXX as a Vice President, overseeing
all sales and marketing for the company.
BENEFICIAL OWNERSHIP
The following table sets forth the beneficial ownership of our outstanding
common stock on July 10, 2000 by (i) each director and executive officer of
our company, (ii) all directors and executive officers of our company as a
group, and (iii) each shareholder who was known by us to be the beneficial
owner of more than five percent (5%) of our outstanding shares:
<TABLE>
<CAPTION>
---------------------------------------------
<S> <C> <C>
COMMON STOCK
------------------------------------
Name and address # of %of
of beneficial owner shares Class Options
---------------------------------------------------------------------------
Jumik Investments, Inc. 16,613,815 77.900% -
Henry Stevens, Majority
and Controlling Shareholder
Henry Stevens 20,000 00.009% -
All Officers and
Directors as a Group 16,633,815 80.00% -
PREFERRED STOCK
------------------------------------
Jumik Investments, Inc. 10,000,000 100.00% -
Henry Stevens, Majority
and Controlling Shareholder
</TABLE>
<PAGE> 33
DIVIDENDS
The Company has never paid dividends with respect to the Common Stock and
currently does not have any plans to pay cash dividends in the future.
There are no contractual restrictions on the Company's present or future
ability to pay dividends. Future dividend policy is subject to the
discretion of the Board of Directors and is dependent upon a number of
factors, including future earnings, capital requirements and the financial
condition of the Company. The Colorado Corporation Code provides that a
corporation may not pay dividends if the payment would reduce the remaining
net assets of the corporation below the corporation's stated capital plus
amounts constituting a liquidation preference to other security holders.
Our management has advised that we may acquire additional shares of our
common stock from time to time in the open market at prices prevailing at
the time of such purchases.
Our company's key personnel bring a broad range of private and public
management, corporate finance and technical skills to the Company.
BOARD OF DIRECTORS
Colorado provides that a corporation's board of directors may be divided
into various classes with staggered terms of office. Our directors are
elected for a term of three years and until their successors are elected
and qualified.
NUMBER OF DIRECTORS
Our board of directors currently consists of two directors. The number of
directors on our board may only be changed by a vote of a majority of our
directors, subject to the rights of the holders of any outstanding series
of our company's preferred stock to elect additional directors.
REMOVAL OF DIRECTORS
Our directors, or the entire board, may be removed for cause by the
affirmative vote of the holders of at least 50% of the outstanding shares
of common stock entitled to vote in the election of directors, voting as a
single class and subject to the rights of the holders of any outstanding
series of our company's preferred stock.
FILLING VACANCIES ON THE BOARD OF DIRECTORS
Any newly created directorships in our board of directors, resulting from
any increase in the number of authorized directors or any vacancies, may be
filled by a majority of the remaining members of such board of directors,
even though less than a quorum, or in the case of our company, by a sole
remaining director, subject to the rights of holders of any outstanding
series of preferred stock. Newly created directorships or decreases in
<PAGE> 34
directorships in our board of directors are to be apportioned among the classes
of directors so as to make all classes as nearly equal in number as practicable,
provided that no decreases in the number of directors in our board of directors
may shorten the term of any director then in office.
To the extent reasonably possible, any newly created directorship will be
added to the class of directors whose term of office is to expire at the
latest date following the creation of that directorship, unless otherwise
provided for by resolution of the majority of the directors then in office.
Any newly eliminated directorship will be subtracted from the class whose
office is to expire at the earliest date following the elimination of the
directorship, unless otherwise provided for by resolution of the majority
of the directors then in office.
ABILITY TO CALL SPECIAL MEETINGS
Special meetings of our company's stockholders may be called by our board
of directors, by affirmative vote of a majority of the total number of
authorized directors at that time, regardless of any vacancies, or by the
chief executive officer.
ADVANCE NOTICE PROVISIONS FOR STOCKHOLDER NOMINATIONS AND PROPOSALS
Our bylaws allow stockholders to nominate candidates for election to the
board of directors at any annual or any special stockholder meeting at
which the board of directors has determined that directors will be elected.
In addition, the bylaws allow stockholders to propose business to be
brought before any annual stockholder meeting. However, nominations and
proposals may only be made by a stockholder who has given timely written
notice to the Secretary of our company before the annual or special
stockholder meeting.
Under our company's bylaws, to be timely, notice of stockholder nominations
or proposals to be made at an annual stockholder meeting must be received
by the Secretary of our company no less than 60 days nor more than 90 days
before the first anniversary of the preceding year's annual stockholder
meeting. If the date of the annual meeting is more than 30 days before or
more than 60 days after the anniversary of the preceding year's annual
stockholder meeting, notice will also be timely if delivered within 10 days
of the date on which public announcement of the meeting was first made by
our company.
In addition, if the number of directors to be elected is increased and no
public announcement is made by us naming all of the nominees or specifying
the size of the increased board of directors at least 70 days before the
first anniversary of the preceding year's annual meeting, or, if the date
of the annual meeting is more than 30 days before or 60 days after the
anniversary of the preceding year's annual meeting, at least 70 days
before the annual meeting, a stockholder's notice will be considered
timely, with respect to the nominees for any new positions created by the
increase, if it is delivered to the Secretary of our company within 10days
of the date on which public announcement of the meeting was first made by
us.
<PAGE> 35
Under our bylaws, to be timely, notice of a stockholder nomination to be
made at a special stockholder meeting must be received no less than 60 days
nor more than 90 days before a special meeting at which directors are to be
elected or within 10 days of the date on which public announcement of the
special meeting was first made by our company.
A stockholder's notice to us must set forth all of the following:
- all information required to be disclosed in solicitations of proxies
forelection of directors, or information otherwise required by applicable
law, relating to any person that the stockholder proposes to nominate for
election or reelection as a director, including that person's written
consent to being named in the proxy statement as a nominee and to serving
as a director if elected
- a brief description of the business the stockholder proposes to bring
before the meeting, the reasons for conducting that business at that
meeting and any material interest of the stockholder in the business
proposed
- the stockholder's name and address as they appear on our books and the
class and number of shares which are beneficially owned by the stockholder
The chairman of our stockholder meeting will have the power to determine
whether the nomination or proposal was made by the stockholder in accordance
with the advance notice procedures set forth in our bylaws.
If the chairman determines that the nomination or proposal is not in
compliance with advance notice procedures, the chairman may declare that
the defective proposal or nomination will be disregarded.
DIRECTOR COMPENSATION
The directors of our company, who are all executive officers as well, are
not compensated for serving.
LIMITATION OF LIABILITY AND INDEMNIFICATION
Our Articles of Incorporation provide that a director of our company shall
not be personally liable to the company or any of its shareholders for
monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the
Company or its shareholders, (ii) for acts or omissions not in good faith
or which involve gross negligence, intentional misconduct or a knowing
violation of law, (iii) for any unlawful distribution as set forth in the
<PAGE> 36
Colorado Model Business Corporation Act of Colorado (the "CMBCA") or (iv)
for any transaction from which the director derived an improper personal
benefit. These provisions may have the effect in certain circumstances of
reducing the likelihood of derivative litigation against directors. While
these provisions may eliminate the right to recover monetary damages from
directors in various circumstances, rights to seek injunctive or other
non-monetary relief is not eliminated.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of our outstanding
common stock on July 10, 2000 by (i) each director and executive officer of
our company, (ii) all directors and executive officers of our company as a
group, and (iii) each shareholder who was known by us to be the beneficial
owner of more than five percent (5%) of our outstanding shares:
<TABLE>
<CAPTION>
---------------------------------------------
<S> <C> <C>
COMMON STOCK
------------------------------------
Name and address # of %of
of beneficial owner shares Class Options
---------------------------------------------------------------------------
Jumik Investments, Inc. 16,613,815 77.900% -
Henry Stevens, Majority
and Controlling Shareholder
Henry Stevens 20,000 00.009% -
All Officers and
Directors as a Group 16,633,815 80.00% -
PREFERRED STOCK
------------------------------------
Jumik Investments, Inc. 10,000,000 100.00% -
Henry Stevens, Majority
and Controlling Shareholder
<PAGE> 37
Our management has advised that we may acquire additional shares of our
common stock from time to time in the open market at prices prevailing at
the time of such purchases.
Our company's key personnel bring a broad range of private and public
management, corporate finance and technical skills to the Company.
DESCRIPTION OF CAPITAL STOCK
As of the date hereof, the authorized share capital of our company consists
of forty million (40,000,000) common shares of which 21,328,000 common
shares are issued and outstanding, and ten million (10,000,000) preferred
shares 10,000,000 of which is designated as series A preferred stock of
which 10,000,000 series A convertible shares are issued and outstanding.
The following is a summary of the principal attributes of the share capital
of our company.
COMMON SHARES
The rights, privileges, restrictions and conditions attached to the common
shares are as follows:
VOTING
Holders of our common shares shall be entitled to receive notice of and to
attend and vote at all meetings of shareholders of our company, except
meetings of holders of another class of shares. Each common share shall
entitle the holder thereof to one vote.
DIVIDENDS
Subject to the preferences accorded to holders of series A shares and any
other shares of the Company ranking senior to the common shares from time
to time with respect to the payment of dividends, holders of common shares
shall be entitled to receive, if, as and when declared by the board of
directors, such dividends as may be declared thereon by the board of
directors from time to time.
LIQUIDATION, DISSOLUTION OR WINDING-UP
In the event of the voluntary or involuntary liquidation, dissolution or
winding-up of our company, or any other distribution of its assets among
its shareholders for the purpose of winding-up its affairs (such event
referred to herein as a "Distribution"), holders of common shares shall be
entitled, subject to the preferences accorded to holders of the series A
shares and any other shares of the Company ranking senior to the common
shares from time to time with respect to payment on a Distribution, to
share equally, share for share, in the remaining property of the Company.
<PAGE> 38
PREFERRED SHARES
Our articles of incorporation provide that the board of directors is
authorized to provide for the issuance of shares of undesignated preferred
stock in one or more series, and to fix the designations, powers,
preferences and rights of the shares of each series and any qualifications,
limitations or restrictions thereof.
The number of authorized shares of our company undesignated preferred stock
may be increased by the affirmative vote of the holders of a majority of
our company's common stock, without a vote of the holders of preferred
stock, unless their vote is required pursuant to the terms of any preferred
stock then outstanding. The number of authorized shares of undesignated
preferred stock of our company may be reduced or eliminated by the
affirmative vote of the holders of 80% of the outstanding capital stock
entitled to vote in the election of directors, voting together as a single
class.
ATTRIBUTES
Subject to the filing of Articles of Amendment in accordance with the Act,
the board of directors may from time to time fix, before issuance, the
designation, rights, privileges, restrictions and conditions attached to
each series of preferred shares including, without limiting the generality
of the foregoing, the amount, if any, specified as being payable
preferentially to such series on a Distribution; the extent, if any, of
further participation on a Distribution; voting rights, if any; and
dividend rights (including whether such dividends be preferential,
cumulative or non-cumulative), if any.
LIQUIDATION
In the event of a Distribution, holders of each series of preferred shares
shall be entitled, in priority to holders of common shares and any other
shares of our company ranking junior to the preferred shares from time to
time with respect to payment on a Distribution, to be paid ratably with
holders of each other series of preferred shares the amount, if any,
specified as being payable preferentially to the holders of such series on
a Distribution.
DIVIDENDS
The holders of each series of preferred shares shall be entitled, in
priority to holders of common shares and any other shares of our company
ranking junior to the preferred shares from time to time with respect to
the payment of dividends, to be paid ratably with holders of each other
series of preferred shares, the amount of accumulated dividends, if any,
specified as being payable preferentially to the holder of such series.
<PAGE> 39
Our company has never paid any dividends on its common shares and intends
to retain its earnings to finance the growth and development of our
business and does not expect to pay dividends in the near future. The
board of directors of our company will review this policy from time to time
having regard to our financing requirements, financial condition and other
factors considered relevant.
RESTRICTIONS ON TRANSFER
"Affiliates" of our company under the Securities Act of 1933, as amended
(the "Securities Act") are persons who generally include individuals or
entities that control, are controlled by, or are under common control with
the company and may include certain officers and directors of the company
as well as principal stockholders of the company. Persons who are
affiliates of the company will be permitted to sell their shares of the
company only pursuant to an effective registration statement under the
Securities Act or an exemption from the registration requirements of the
Securities Act, such exemptions afforded by Section 4(1) or 4(2) of the
Securities Act or Rule 144 thereunder.
CERTAIN PROTECTIVE PROVISIONS
GENERAL
The articles and bylaws of our company and the CMBCA contain certain
provisions designed to enhance the ability of the board of directors to
deal with attempts to acquire control of our company. These provisions may
be deemed to have an anti-takeover effect and may discourage takeover
attempts which have not been approved by the board of directors (including
potential takeovers which certain shareholders may deem to be in their best
interest) and may adversely effect the price that a potential purchaser
would be willing to pay for our stock. These provisions also could
discourage or make more difficult a merger, tender offer or proxy contest,
even though such transaction may be favorable to the interests of
shareholders, and could potentially adversely effect the price of our
common stock.
The following briefly summarizes protective provisions contained in the
articles, the bylaws and the CMBCA. This summary is necessarily general and
is not intended to be a complete description of all the features and
consequences of these provisions, and is qualified in its entirety by
reference to our articles, bylaws and the provisions of the CMBCA.
Our company has one class of common stock issued and outstanding. Holders
of our company's common stock are each entitled to one vote for each share
held.
<PAGE> 40
AMENDMENT OF ARTICLES OF INCORPORATION
Under Colorado law, articles of incorporation of a Colorado corporation may
be amended by approval of the board of directors of the corporation and the
affirmative vote of the holders of a majority of the outstanding shares
entitled to vote for the amendment, unless a higher vote is required by the
corporation's articles of incorporation.
Our articles of incorporation provides that the affirmative vote of the
holders of at least 50% of the outstanding shares of capital stock of our
company entitled to vote in the election of directors, voting together as a
single class, will be required to reduce or eliminate the number of
authorized shares of common stock or preferred stock, or to amend, repeal
or adopt any provision inconsistent with the provisions of the articles of
incorporation which deal with the following:
-undesignated preferred stock
-matters relating to the board of directors, including the number of
members, board classification, vacancies and removal
-the powers and authority expressly conferred upon the board of directors
-the manner in which stockholder action may be effected
-amendments to bylaws
-business combinations with interested stockholders of our company
-indemnification of officers and directors of our company
-the personal liability of directors to our company or its stockholders
for breaches of fiduciary duty
-the amendment of our company's articles of incorporation
AMENDMENT OF BYLAWS
Under Colorado law, stockholders entitled to vote have the power to adopt,
amend or repeal bylaws. In addition, a corporation may, in its articles of
incorporation, confer such power upon the board of directors. The
stockholders always have the power to adopt, amend or repeal bylaws, even
though the board may also be delegated such power.
Our board of directors is expressly authorized to adopt, amend and repeal
the bylaws by an affirmative vote of a majority of the total number of
authorized directors at that time, regardless of any vacancies.
Our bylaws may also be adopted, amended and repealed by the affirmative
vote of the holders of at least 50% of the outstanding shares of capital
stock entitled to vote in the election of directors, voting together as a
single class.
<PAGE> 41
LIMITATION OF LIABILITY OF DIRECTORS
The CMBCA permits a corporation to include a provision in its articles of
incorporation eliminating or limiting the personal liability of a director
or officer to the corporation or its stockholders for damages for a breach
of the director's fiduciary duty, subject to certain limitations. Our
articles of incorporation include such a provision to the maximum extent
permitted by law.
While these provisions provide directors with protection from awards for
monetary damages for breaches of their duty of care, they do not eliminate
that duty. Accordingly, these provisions will have no effect on the
availability of equitable remedies such as an injunction or rescission
based on a director's breach of his duty of care.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The CMBCA permits a corporation to indemnify officers and directors for
actions taken in good faith and in a manner they reasonably believed to be
in, or not opposed to, the best interests of the corporation, and with
respect to any criminal action, which they had no reasonable cause to
believe was unlawful. Our articles of incorporation and bylaws provide that
any person who was or is a party or is threatened to be a party to or is
involved in any action, suit, or proceeding, whether civil, criminal,
administrative or investigative, because that person is or was a director
or officer, or is or was serving at the request of either of us as a
director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, will be indemnified
against expenses, including attorney's fees, and held harmless by each of
us to the fullest extent permitted by the CMBCA. The indemnification rights
conferred by each of us are not exclusive of any other right to which
persons seeking indemnification may be entitled under any statute, our
articles of incorporation or bylaws, any agreement, vote of stockholders or
disinterested directors or otherwise. In addition, each of us is authorized
to purchase and maintain insurance on behalf of its directors and officers.
Additionally, each of us may pay expenses incurred by our directors or
officers in defending a civil or criminal action, suit or proceeding
because that person is a director or officer, in advance of the final
disposition of that action, suit or proceeding. However, such payment will
be made only if we receive an undertaking by or on behalf of that director
or officer to repay all amounts advanced if it is ultimately determined
that he or she is not entitled to be indemnified by us, as authorized by
our articles of incorporation and bylaws.
REGISTRAR AND TRANSFER AGENT
The registrar and transfer agent is Nadeau & Simmons, P.C., 1250 Turks Head
Building, Providence, Rhode Island 02903 (401) 272-5800.
<PAGE> 42
INTEREST OF NAMED EXPERTS AND COUNSEL
IN REGISTRATION STATEMENT
No expert named in this prospectus was paid on a contingent basis or had a
material interest in our Company or any of its subsidiaries or was
connected with our company or any of its subsidiaries as a promoter,
underwriter, voting trustee, director, officer or employee.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Our Articles of Incorporation provide that a director shall not be
personally liable to any of its shareholders for monetary damages for
breach of fiduciary duty as a director, except liability for the following:
(a) any breach of the director's duty of loyalty to our Company or
its shareholders;
(b) acts or omissions not in good faith or which involve gross
negligence intentional misconduct or a knowing violation of law;
(c) any unlawful distribution as set forth in the General Corporation
Law of the State of Colorado; or
(d) any transaction from which the director derived an improper
personal benefit.
These provisions may have the effect in certain circumstances of reducing
the likelihood of derivative litigation against directors. While these
provisions may eliminate the right to recover monetary damages from
directors in various circumstances, rights to seek injunctive or other
non-monetary relief are not eliminated.
Our By-laws provide for indemnification of our company's directors to the
fullest extent permitted by law. The bylaws also permit our company,
through action of the board of directors, to indemnify the officers or
employees to the fullest extent permitted by law.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "1933 Act") may be permitted to directors, officers and
controlling persons of our company pursuant to the foregoing provisions, or
otherwise, we have been advised that in the opinion of the Securities and
Exchange Commission (the "Commission") such indemnification is against
public policy as expressed in the 1933 Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by our company of expenses incurred or
paid by a director, officer or controlling person in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, our
company will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the 1933 Act and will be governed by the
final adjudication of such issue.
<PAGE> 43
BUSINESS
BUSINESS DESCRIPTION
NATURE OF ACTIVITIES
PVAXX CORPORATION ("PVAXX" or the "Company") was incorporated as a Florida
corporation on March 16, 2000. Pvaxx Corporation, is the parent company of
the Pvaxx group of companies.
The Pvaxx group consists of Pvaxx Technologies Ltd, which holds the patents
and intellectual property. Pvaxx Research & Development Ltd, the company
undertaking all ongoing trials and developments. And also does business as
Pvaxx Engineering, which manufactures all our pelleting machines and Pvaxx
Pharmaceutical which manufactures and supplies capsule making machinery.
Pvaxx Europe, Ltd is the European sales company of the group.
Pvaxx has just taken possession of a newly built European HQ near
Malmesbury in Wiltshire, which includes 3000sqft sales offices, 2000sqft
engineering, 2000sqft development labs, 4000sqft manufacturing areas.
Pvaxx is a completely biodegradable polymer. We believe PVAXX represents a
genuine advance in polymer technology. Management feels that Pvaxx will be
a major contributor to the reduction in the environmental and ecological
impact of plastics. PVAXX offers the potential of practical solutions to
worldwide waste disposal problems, as all products manufactured from Pvaxx
biodegrade into non-toxic elements when disposed of through water immersion
or in landfill.
Pvaxx is a newly formulated polymer, created by a patented process and
manufactured from the chemical raw material Polyvinyl Alcohol 'pva' and
other food-grade additives, which have been used in consumer markets for
over 25 years. Thus its properties, both physical and toxicological, as
well as its environmental impact from its bio-degradation on disposal have
been studied in depth.
Pvaxx, is a stable, flexible polymer similar to other everyday polymers.
It is available in various grades suitable for most product areas. Pvaxx
production consumes a very low level of energy as no external heat is
introduced, creating potentially greater environmental advantages.
Pvaxx polymer grades are available from $1,200 per metric tonne. This makes
it comparable with PP, PVC, PE, PET etc. PVAXX is far less expensive than
other biodegradable polymers currently in the market.
Pvaxx pharmaceutical grades are available from $6,000 per metric ton. The
various technologies that make up Pvaxx were either acquired by or
developed within Pvaxx Group. Development was undertaken within the Irish
Government Research and Development Department, PERA, Leeds University and
<PAGE> 44
University of North London and within our own facilities both in England and
in the Isle of Man. The above have a wide range of experience in the development
of laboratory led research and testing of polymers and plastic processes and
products. More than a decade of associated research and over five years of
laboratory and industrial assessment has gone into the development of Pvaxx.
This includes full industrial, scientific and technical assessment throughout
its development.
Pvaxx offers biodegradability at a cost that is competitive when compared
with other plastics. Alternative products based on starch additives,
fragment, but may not decompose. Those polymers that do biodegrade are
generally expensive and can be difficult to process.
Pvaxx process eliminates the problems usually associated pva production;
such as thermal degradation and the need to generate high temperatures. It
can be processed using current extrusion lines, blow-moulders and injection
moulders etc., without modifications usually required with pva products.
Pvaxx is particularly well-suited to filament and fibre formation, for use
in spunbond, non-woven and melt-blowing applications.
Pvaxx can be processed on Pvaxx Pharmaceutical Capsule machines to produce
and fill with powder or liquid medicines to make medical capsules or food
supplements.
The Pvaxx manufacturing process enables highly accurate compounding and
pelleting with consistent quality.
Pvaxx is a competitively priced material thus it can be used in the
manufacture of basic and premium products. These include, but are not
limited to, the following areas listed together with some consumption
examples.
Agricultural Agro-chem sachets, Mulch films, Plant pots Household Bags,
Diapers, Drinking straws, Femcare products, Hangers, Incontinence pads,
Sachets, Six pack rings Industrial Chemical sachets, Disposable clothing,
Expanded foams, Gloves.
Leisure Film canisters, Golf tees, Shotgun cartridges Medical Bedpans,
Bowls, Cotton buds, Hospital curtains, 'One-use' sterile products,
capsules.
Pvaxx has test marketed using a UK chemical/polymer distributor, enabling
Pvaxx to refine such things as packaging, grades and pricing before a
international launch. The manufacturing division is currently capable of
producing up to 10,000 tons per annum of Pvaxx. Pvaxx's management
believes the Company has the ability to manufacture further production
capacity to increase production by a further 20,000 tons every 14 weeks
when required. The raw materials used are all sourced from the major
manufacturers such as, Nippon Gohsei, Omya, ECC, Chang Cheung, Unichema ,
Jordan Carbonate, etc.
<PAGE> 45
The selling of Pvaxx via the internet supported by our technical centre
provides 24hr access to sales and technical information. Pvaxx has already
started to appoint polymer and chemical distribution agents, therefore
increasing active promotion of Pvaxx worldwide.
MARKETS
Plastic has become essential to the functioning of modern life around the
world. The plastics market has recently been valued at more than $200
billion per year and continues to rise.
Eight percent of US household waste, over 13 million tons per year, is made
up of plastics and is consigned to landfill. This is repeated throughout
the developed world.
".... studies now confirm only 20 per cent of plastic waste could be
recycled.." said Mr. Reg. McCabe director of the Plastics Industries
Association of Ireland......in the light of growing public concern about
additional landfill sites..... business called on Government to help out
with 136,000 tonnes of plastic packaging waste which are produced each
year...
PERA have completed a detailed market study for Pvaxx showing an immediate
market of 30 million tonnes in areas where Pvaxx is cheaper or has other
attributes that make it immediately superior to current the polymers being
used.
MARKETING PLAN
The marketing strategy for Pvaxx is very important and we are not just
selling a product by purely following a product marketing Strategy.
Management believes PVAXX offers a solution to policy makers by offering
the option of a "green"(or environmentally friendly) polymer such as
Pvaxx.
PRESS, PUBLIC RELATIONS AND LOBBYING
Given the range of applications in all kinds of sectors in many parts of
the world, Management feels the PR potential for Pvaxx is huge.
PVAXX is beginning to create a multi language media relations program
embracing both trade and technical media, together with "heavy" national
newspapers and magazines in appropriate sectors, such as food, fashion,
pharmaceuticals etc.
Pvaxx also presents the opportunity for a media event in which we could
effectively demonstrate the biodegradability of Pvaxx. We can also supply
all media and key people we target with a small case of samples that
enables them to carry out their own experiment.
<PAGE> 46
In this era of over consumption and plastic use, Management believes policy
makers are looking to promote new plastics which are environmentally
friendlier than existing plastics and in particular biodegradable.
Environmental attributes such as complete biodegradability are highly
sought after by industry and policy makers especially due to plastic
related issues such as:
- Low environmental rating from cradle to grave
- Endocrine mimicry
- Waste and packaging problems including landfill over capacity,
incineration and dioxin issue, take back requirements, recycling
requirements, agricultural leaching etc.
Due to new research on phthalates and similar plastics which can cause
endocrine mimicry, policy makers are looking at substitutes for such
plastics to justify a ban.
In addition governments are also looking to find solutions to the
mountains of plastic waste accumulating in their landfills and to the
toxicity problems of plastic residue in soil, groundwater or via leaching
directly into foodstuffs. Not to mention dioxin emissions when plastics
are burned. These issues have led to interim solutions such as recycling,
take back policies etc.. but policy makers believe that the ultimate
solution remains the complete biodegradability of plastics.
In order to properly "inform" policy makers of the existence and benefits
of Pvaxx, Management intends to employ a two tiered approach:
First, all relevant actors at the Senior Government level must be
personally informed of the environmental attributes of Pvaxx. This
informing process is a delicate balancing act based on knowledge of
institutional and political interplay.
As the debate on plastic products and waste develops Pvaxx must be seen
as a pro-active industry producing a new green product.
If the company has won the hearts of officials through sound R&D and
environmental proof, new legislation in its favor will most likely be
forthcoming, as long as the "informing" process has been conducted in a
professional/diplomatic manner.
Second, local and state governments and local authorities must also be
approached.
<PAGE> 47
Of course throughout the entire "informing process" new elements or
developments must be integrated into the strategy and used to influence
each actor. In addition, we hope to forge alliances with parties also
interested in changing national legislation to benefit cleaner plastics.
These parties could be industry federations or representatives as well as
respected non-governmental organizations.
INTERACTIVE WEBSITE
A "live" website, initially in 5 languages with an active inquiry office
and updateable news section is at the heart of the marketing.
PROFILE DOCUMENT
We have produced a publication about Pvaxx and the environment. It too is
reflective of the website; but is presented specifically for serious people
who influence the purchase of plastics.
ADVERTISING
Here we have an opportunity to gain exposure both to people who buy and
people who influence. The media coverage of the Company will provide useful
additional advertising for the product and vise versa. We intend to place
announcements of the share exchange in the FT, the Wall Street Journal,
Paris Match etc. together with product advertisements in magazines in
sectors such as food and drink, pharmaceuticals, etc.
EXPENDITURE
We have budgeted about $160,000 with a possible growth from earnings to
$800,000. The former will give us good exposure, the second would enable us
to put Pvaxx forward as a highly visible global brand.
ENVIRONMENTAL ISSUES
Plastics have considerable utility but also result in significant amounts
of waste - both during manufacture and following their use as products.
Unfortunately this waste has a highly visible profile which, combined with
its indefinite lifespan, does not allow the problem to fade from either the
public or the legislators minds.
As environmental issues become increasingly voiced, the use and disposal of
'traditional' plastic materials which currently are non biodegradable, are
becoming a cause for concern. Public opinion, i.e. regarding the threat to
the environment, has caused the European Union (EU) to outline quality
standards for products, production standards and pollution levels which
will enable countries within the EU to tighten their legislation.
<PAGE> 48
DISPOSAL AND POLLUTION
BIODEGRADATION OF PVA
PVA biodegrades with the aid of micro-organisms commonly found in waste
water. Due to the extensive usage of PVAs in a variety of industries, a
considerable number of studies have been under taken confirming that
Polyvinyl alcohol is biodegradable under both aerobic conditions (sewage
treatment with air) and anaerobic conditions (precipitation onto unstirred
sludge).
1. Aerobic Conditions
Activated sludge, mineral nutrients and the test material as the sole
carbon source in an aqueous solution are placed together in a 4 litre glass
vessel equipped with an agitator and aerated at 22C under diffuse
illumination for up to28 days. The degradation process is monitored by
determination of the dissolved organic carbon content (DOC) level in
filtered samples of the mix. The reduction in DOC is plotted against time.
A loss of greater than 70% of DOC is considered as evidence of ultimate
biodegradability. In general it is found that the rate of DOC loss will
depend on whether the sewage sludge has adapted to the compound under
consideration. It is seen that the PVA is degraded virtually completely in
about 14 days with the non-adapted sludge and in about 5-6 days for the
adapted sludge.
2. Anaerobic Conditions
The method used was one developed by the Water Research Association and
subsequently published by the UK Standing Committee of Analysts
The principle of the method is that under anaerobic conditions a chemical
may be broken down through certain types of bacteria to give methane and
carbon dioxide. Determining the difference in total gas produced (CH4 + C02)
by anaerobic digesting sludge alone (blank) and by the sludge supplemented
with the test chemical gives an assessment of biodegradability.
The test chemical is incubated with digesting sludge in bottles sealed with
septa through which a determination of pressure increase can be measured
which in turn can be converted to the quantity of gas produced. This is
compared to the total theoretical gas production to give a percentage
degradation figure. Using a non adapted sewage sludge it is seen that
degradation is not so rapid as that found under aerobic conditions but
again it is expected that an adapted
sludge would cause faster degradation
BIODEGRADATION, ORGANISMS AND EFFLUENT DISPOSAL OF POLYVINYL ALCOHOL
The biodegradability of polyvinyl alcohol has been principally studied in
relation to the use of the polymer in textile manufacturing and finishing
processes. The polymer has a negligible biological oxygen demand (BOD) for
periods up to 30 days when exposed to non-acclimated domestic sludge
<PAGE> 49
micro-organisms. In these conditions, the polyvinyl alcohol present in an
affluent does not inhibit the metabolism of existing activated sludge
micro-organisms. Activated sludge micro-organisms can be acclimated to
polyvinyl alcohol under the conditions of conventional waste water
treatment processes. Studies of the long-term biodegradability of
polyvinyl alcohol and other textile chemicals compared 30 day BOD results
with the COD of samples, and indicated that activated sludge treatment
removed 94 of polyvinyl alcohol: long-term aeration is recommended for
biological treatment.
Controlled experimentation with polyvinyl alcohol indicate that the polymer
may be completely degraded.
A range of organisms able to degrade and assimilate polyvinyl alcohol
completely has been identified and studied in detail. The polymer is
attacked by Pseudomonas 0-3 (isolated from soil by growing cultures on
nutrient agar for 12 days at 27C) which produces and secretes a polyvinyl
alcohol-degrading enzyme into the medium. Isolation and purification of
this enzyme indicated that it was an oxidase, since it degraded polyvinyl
alcohol oxidatively, producing hydrogen
peroxide, with degradation products including terminal carboxyl groups and
methyl ketones.
The degradation of polyvinyl alcohol therefore consists of two types of
reaction:- oxidation of hydroxyl groups and cleavage of C-C linkages, with
production of hydrogen peroxide in addition.
In more recent studies, mixed continuous cultures of polyvinyl
alcohol-utilizing symbionts have been developed. These are stable mixed
cultures of Pseudomonas VM15C and Pseudomonas putida VMl5A. The former
produced a polyvinyl alcohol-degrading enzyme and the latter produced an
essential growth factor for polyvinyl alcohol utilization by strain VMl5C.
The predominant metabolzing strain was VM15C, with the growth supporter
VMl5A as a minor component. The growth-limiting substrate for strain VMl5C
in the mixed continuous culture is
the growth culture produced by strain VMl5A.
A micro-organism for polyvinyl alcohol degradation similar to Pseudomonas
vesicularis has been isolated, which requires thiamin as a growth factor
with glucose present, and also requires three amino acids (tyrosine or
phenylalanine, isoleucine, and cystine) and has been named P. vesicularis
var. povalolyticus PH. Another organism believed to be a different variety
of P. vesicularis, able to grow on polyvinyl alcohol medium without
additional nutrient, has been
isolated.
CONCLUSION
Polyvinyl alcohol can be bio-degraded under both aerobic and anaerobic
conditions. Degradation is faster with adapted sewage sludges and probably
faster under aerobic rather than anaerobic conditions.
<PAGE> 50
Other than biodegradation there are currently three methods by which the
visual impact of plastic pollution can be reduced. The problem common to
each alternative is the vast amount of time and energy required to
separate, collect, transport and segregate astronomical numbers of pieces
of waste.
INCINERATION
Apart from requiring considerable amounts of energy, incineration will also
produce vast quantities of gases, contributing to the 'greenhouse effect',
with all its publicly negative aspects. PVC, one of the commonest
pollutants, when combusted produces hydrogen chloride, requiring expensive
materials in the construction of incinerators along with downstream acid
gas scrubbing equipment. Overall incineration is expensive and creates
further pollution.
LAND FILL
Land fill sites are expensive in terms of construction and management and
tie up valuable land for indefinite periods. They are filling up and
closing at a high rate so reducing the number of available sites.
RECYCLING
This requires the physical separation on each waste site of all plastic
from non plastic material. This then has to be followed by the attempted
sorting and segregation of different types of plastic from each other,
without the benefit of chemical analysis. Next the waste is transported to
the recycling site for treating and re-analyzing before re-inclusion into a
manufacturing process.
A daunting time consuming and expensive task, which is open to accidental
miss-sorting and subsequent abortive processing. To quote the British
Plastics Federation Statistics Handbook:-"the problem for industry is that
reprocess feedstocks are often of inconsistent quality and there remain
concerns about incorporating reclaimed material into food or technical
applications."
The problem is not confined to Western Europe. In the USA, where household
waste stands at 190 million tons per annum, thirteen million of this
represents plastic products which are delivered to landfill. Because of
such pollution issues Japan now exports its waste and countries like
Canada, Australia and France are in a similar position.
TOXICOLOGY APPRAISAL
Extensive work has been done testing PVA and derivatives for toxic
properties. Work has also been done to evaluate the tolerability of both
skin and mucous membranes; from which the conclusion was that no untoward
effects were revealed in animal tests. The following conclusions have been
reached by evaluation of test results:
<PGE> 51
_ PVA is virtually non-toxic in acute tests (LD50 for rats after oral
administration). Also 90 day feeding tests on rats with selected film
grades did not reveal any harmful effect in relation to behaviour,
body weight development, or food acceptance by them, even in the case
of the largest amounts administered (5% in the food). No harmful
effects or changes were observed in haematological, clinico-chemical
or urine examinations or in the microscopic evaluation and
histological examination of the internal organs.
_ Tests with dilute solutions have revealed that sensitive fish suffer
no ill-effects even in water with concentration of 500 mg film per
litre.
_ PVA is not a skin irritant as determined in the Patch Test in
accordance with the FDA (Food and Drug Administration) specifications
current at the time of the experiment.
_ PVA does not irritate the mucous membrane in the eye (irritation test
in accordance with FDA specification).
_ PVA has no toxic effect due to absorption following repeated
application to the skin. The material has also been certified for use
in cosmetics.
_ Standard precautions should be taken to avoid inhalation of any dust
formed during processing, for general reasons of industrial hygiene,
by use of a dust mask.
_ PVA can be employed in the manufacture of consumer goods as defined
in paragraph 5 of the German Federal Foodstuffs and Consumer Goods Law
of August 15, 1974 in accordance with various recommendations of the
Plastics Committee of the German Federal Ministry of Health. Thus, in
accordance with Recommendation XXXVI, "Paper cartons and cardboard for
foodstuffs packaging", PVA can be employed as a surface decoration and
coating material. The FDA allows its use as adhesives and as a resin
for coatings for food packaging.
OTHER DEGRADABLE POLYMERS
Many plastics are now being marketed, at least partially, on their
environmental merits. This may be for very different reasons e.g. The
following list of some degradable polymers manufacturers and is divided
into: Synthetic polymers, Starch-based polymers, Biopolymers and
Biocompostibles;
Synthetic Polymers
Carbonnages de France - have developed a polyurethane material used for
mortuary shrouds.
Union Carbide - have developed Caprolactone polyester for tree seedling
containers.
<PAGE> 52
Starch-based Polymers
Warner-Lambert, USA. - 'Novon' product claimed to be suitable as a
replacement for PS and PE in disposable product applications e.g.
injection moulding of pharmaceutical capsules.
Biopolymers
(Plastic materials produced by micro-organisms)
Monsanto, England - 'Biopol' (predominately polyhydroybutyrate) -
promoted as 'Nature's Plastic'. Basically a thermoplastic linear
polyester used for bottles and mouldings. This relatively stiff material
produced by biological fermentation of sugars to produce carbohydrates
from which 'Biopol' is manufactured. Fully biodegradable.
Biocompostibles
(standard plastics with a starch additive)
There are many companies in this category, but as only the starch
additive biodegrades and the starch loaded derivatives do not fully
biodegrade, they leave small particles of undegraded polyethylene, or
other polymer and cause ecological dangers which have been under
investigation.
EXISTING LEGISLATION
Generally speaking, governments have been wary of legislating against
particular plastics as this would lead to distortions in the market. The
following list is a sample of legislation and is not necessarily up to
date.
EC Legislation Community Waste Management Strategy suggests a five point
strategy for dealing with waste (not only plastics);
1) prevention;
2) recycling and re-use;
3) optimisation of final disposal;
4) regulation of transport;
5) remedial action.
Waste Framework Directive (75/442), amended, requires member States to
establish waste authorities and encourage waste prevention, recycling and
processing. The definitions of waste and disposal were tightened up under
the amendment.
<PAGE> 53
Denmark
Statutory Order 397 states that beer and soft drinks may only be sold in
refillable packaging, ruling out PET and PVC bottles. There is a tax on all
landfill or incinerated waste in order to encourage waste minimisation and
recycling.
France
Established a number of voluntary agreements between industry and
government to set targets for recycling plastics.
Germany
Waste Avoidance and Management Act increasingly requires manufacturers to
be responsible for the waste they produce.
Italy
Legislation on the control of non-degradable products. Required all
packaging materials to be biodegradable and banned plastic bags - other
than for waste collection. Law was revised following industry pressure to
require 'fast biodegradability or easy recovery for recycling'. An ecology
tax of 100 lire per plastic bag which was less than 90% degradable. This
was supported by the European Court of Justice.
USA
Many states have laws requiring that 'six pack' rings and fast food
packaging should be manufactured from degradable materials and banning non
degradable garbage sacks from landfill.
GENERAL
Eco-taxes are on the horizon and may be expected to be used to reflect the
environmental costs of products. The UK government, is seriously examining
the use of economic instruments to bring about environmental improvements.
COMPETITION
The biodegradable plastics industry in which the Company operates is highly
competitive. Some of the company's principal competitors in certain
business lines are substantially larger and better capitalized than the
Company. Because of these resources, these companies may be better able
than the Company to obtain new customers and to pursue new business
opportunities or to survive periods of industry consolidation.
<PAGE> 54
LEGAL PROCEEDINGS
The Company has no outstanding litigation and is not aware of any
threatened litigation. The Company is expected to be involved from time to
time in various claims, actions and lawsuits incidental to its business.
The Company believes the ultimate liability there under, if any, will not
have a material affect on the financial condition of the Company.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
March 31, 2000
=====================================
SIX MONTHS ENDING MARCH 31, 2000
=====================================
Except for historical information, the discussion in this Form SB-2
contains forward-looking statements that involve risks and uncertainties.
These statements may refer to the Company's future plans, objectives,
expectations and intentions. These statements may be identified by the use
of words such as "expect", "anticipate", "believe", "intend", "plan" and
similar expressions.
The Company's actual results could differ materially from those anticipated
in such forward-looking statements. Factors that could contribute to these
differences include, but are not limited to, the risks discussed in the
section titled "Market Risks and other Business Factors" later in this Form
SB-2.
NEW ACCOUNTING PRONOUNCEMENTS
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of" ("SFAS 121") issued by the FASB, is effective for financial statements
for fiscal years beginning after December 15, 1995.The standard establishes
new guidelines regarding when impairment losses on long-lived assets, which
include plant and equipment, certain identifiable intangible assets, and
goodwill, should be recognized and how impairment losses should be
measured. The Company does not expect adoption to have a material effect on
its financial position or results of operations. Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation"
("SFAS 123") issued by the FASB, is effective for specific transactions
entered into after December 15, 1995. The disclosure requirements of SFAS
123 are effective for financial statements for fiscal years beginning no
later than December 15, 1995. The new standard established a fair value
method of accounting for stock-based compensation plans and for
transactions in which an entity acquires goods or services from
non-employees in exchange for equity instruments. The Company does not
expect adoption to have a material effect on its financial position or
results of operations.
<PAGE> 55
COMPLETION OF THE SHARE EXCHANGE
A Plan and Agreement of Share Exchange was executed on May 19, by and among
OAK BROOK, PVAXX, Mark T. Thatcher and Gerard M. Werner, who joined in the
execution of the Agreement for the purpose of making certain covenants
regarding the transaction contemplated therein. OAK BROOK is a corporation
duly organized and validly existing under the laws of the state of
Colorado, with its registered office at 17 West Cheyenne Mountain Blvd.,
Colorado Springs, Colorado 80906, its principal executive office at 1250
Turks Head Building, and its phone number is (401) 272-5800; PVAXX is a
corporation duly organized and validly existing under the laws of the state
of Florida, with its registered office located in the city of Ft. Myers,
State of Florida, its principal executive office at 12730 New Brittany
Boulevard, Ft. Myers, FL 33907, and its phone number is (941)274-9355; and
Mark T. Thatcher is the Chairman and Secretary and Gerard M. Werner is the
President and a Director of OAK BROOK.
The respective boards of directors of OAK BROOK and PVAXX deemed it
desirable and in the best interests of their respective corporations, for
OAK BROOK to acquire the outstanding capital stock of PVAXX in exchange for
the issuance of shares of the common and preferred stock of OAK BROOK and
proposed, declared advisable and approved such share exchange (the "PVAXX
EXCHANGE") pursuant to this Agreement, which Agreement has been duly
approved by resolutions of the respective boards of directors and a vote by
the shareholders of OAK BROOK and PVAXX.
AMENDMENT TO ARTICLES OF INCORPORATION
The Board of Directors and shareholders have unanimously approved for the
restatement and amendment of the Company's Articles of Incorporation in
order to change the Company's name to "PVAXX CORPORATION".
Approval of the restatement and amendment will not result in any other
material amendment or change to the Company's Articles of Incorporation.
The restatement and amendment is required to effect the Company's
acquisition of PVAXX.
APPROVAL OF PLAN OF SHARE EXCHANGE
The Board of Directors and shareholders have unanimously approved a Plan
and Agreement of Share Exchange (the "Exchange"), whereby OAK BROOK
acquired all of the issued and outstanding capital stock of PVAXX in
exchange for 20,000,000 shares of the Common stock of OAK BROOK and
10,000,000 shares of the Preferred Stock of OAK BROOK.
<PAGE> 56
MARKET RISKS AND OTHER BUSINESS FACTORS
In passing the Private Securities Litigation Reform Act of 1995 (the
AReform Act@), Congress encouraged public companies to make "forward
looking statements" by creating a safe harbor to protect companies from
securities law liability in connection with forward looking statements. We
intend to qualify both our written and oral forward looking statements for
protection under the Reform Act and any other similar safe harbor
provisions.
Generally, forward looking statements include expressed expectations of
future events and the assumptions on which the expressed expectations are
based. All forward looking statements are inherently uncertain as they are
based on various expectations and assumptions concerning future events and
they are subject to numerous known and unknown risks and uncertainties
which could cause actual events or results to differ materially from those
projected.
Due to those uncertainties and risks, the investment community is urged not
to place undue reliance on our written or oral forward looking statements.
We undertake no obligation to update or revise our for forward looking
statements to reflect future developments. In addition, we
undertake no obligation to update or revise forward looking statements to
reflect changed assumptions, the occurrence of unanticipated events or
changes to future operating results over time.
PLAN OF OPERATION
PVAXX does not currently have any external sources of working capital.
PVAXX's Management has not entered into any commitments for significant
capital expenditures. Furthermore, there are no plans to hire additional
employees unless Management is successful in securing a substantial capital
infusion. On May 19, 2000 PVAXX entered into an Agreement to effectively
become a wholly-owned subsidiary of OAK BROOK. This transaction will be
structured as a share exchange whereby the existing shareholders of PVAXX
will obtain control of OAK BROOK. Upon completion of this transaction,
there can be no assurance that the combined companies will have sufficient
funds to undertake any significant development, marketing and manufacturing
activities. Accordingly, the combined companies will be required to either
seek additional debt or equity financing or obtain funding from third
parties, in exchange for which the combined companies might be required to
issue a substantial equity position. There is no assurance that the
combined companies will be able to obtain additional financing on terms
acceptable to the combined companies. If Management is successful in
obtaining additional funding, these funds will be used primarily to provide
working capital needed for repayment of outstanding notes payable, software
development, sales and marketing expense and to finance research,
development and advancement of intellectual property concerns.
<PAGE> 57
LIQUIDITY AND CAPITAL RESOURCES
The Company remains in the development stage and, since inception, has
experienced no significant change in liquidity or capital resources or
stockholder's equity. The Company's balance sheet as of March 31, 2000,
reflects a current asset value of $0.00, and a total asset value of $0.00
in the form of cash and capitalized organizational costs.
The Company is considering the sale of equity in connection with a
secondary offering later in 2000. The Company does not have any
underwriting commitments for such sale of equity. There can be no assurance
that any such sale will close by such date or at all or that the Company
will continue to consider such an offering.
EVOLVING INDUSTRY STANDARDS; RAPID TECHNOLOGICAL CHANGES
The Company's success in its business will depend in part upon its
continued ability to enhance its existing products and services, to
introduce new products and services quickly and cost effectively to meet
evolving customer needs, to achieve market acceptance for new product and
service offerings and to respond to emerging industry standards and other
technological changes. There can be no assurance that the Company will be
able to respond effectively to technological changes or new industry
standards. Moreover, there can be no assurance that competitors of the
Company will not develop competitive products, or that any such competitive
products will not have an adverse effect upon the Company's operating
results.
Moreover, management intends to continue to implement "best practices" and
other established process improvements in its operations going forward.
There can be no assurance that the Company will be successful in refining,
enhancing and developing its operating strategies and systems going
forward, that the costs associated with refining, enhancing and developing
such strategies and systems will not increase significantly in future
periods or that the Company's existing software and technology will not
become obsolete as a result of ongoing technological developments in the
marketplace.
VOLATILITY OF STOCK PRICE
The Company believes factors such as the Company's liquidity and financial
resources, quarter to quarter and year to year variations in financial
results could cause the market price of the Company's common stock to
fluctuate substantially. Any adverse announcement with respect to such
matters or any shortfall in revenue or earnings from levels expected by
management could have an immediate and material adverse effect on the
trading price of the Company's common stock in any given period. As a
result, the market for the Company's common stock may experience material
adverse price and volume fluctuations and an investment in the Company's
common stock is not suitable for any investor who is unwilling to assume
the risk associated with any such price and volume fluctuations.
<PAGE> 58
The Company is considering the sale of equity in connection with a
secondary offering prior to the end of 2000. The Company has not received
any commitment for such an offering, and no assurance can be provided that
the Company will receive any such commitment, or that any such offering, if
undertaken, will be successful.
SUFFICIENCY OF CASH FLOWS
The Company believes that current cash balances and any cash generated from
operations and from available debt or equity financing will be sufficient
to meet its cash needs for working capital and capital expenditures for at
least the next twelve months. Thereafter, if cash generated from
operations is insufficient to satisfy the Company's liquidity requirements,
management may seek to sell additional equity or obtain credit facilities.
The sale of additional equity could result in additional dilution to the
Company's shareholders. A portion of the Company's cash may be used to
acquire or invest in complementary businesses or products or to obtain the
right to use complementary technologies. From time to time, in the ordinary
course of business, the Company evaluates potential acquisitions of such
businesses, products or technologies.
RESULTS OF OPERATIONS
During the period from May 16, 2000 (inception) through May 15, 2000, the
Company has engaged in no significant operations other than organizational
activities, acquisition of capital and preparation for reporting as a
registrant under Section 12 of the Securities Exchange Act of
1934, as amended. No revenues were received by the Company during this
period.
INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes"
("SFAS 109") issued by the Financial Accounting Standards Board ("FASB"),
under which deferred tax assets and liabilities are provided on differences
between the carrying amounts for financial reporting and the tax basis of
assets and liabilities for income tax purposes using the enacted tax rates.
Under SFAS 109, deferred tax assets may be recognized for temporary
differences that will result in deductible amounts in future periods. A
valuation allowance is recognized, if on the weight of available evidence,
it is more likely than not that some portion or the entire deferred tax
asset will not be realized.
FEDERAL INCOME TAX ASPECTS OF INVESTMENT IN THE COMPANY
The discussion contained herein has been prepared by the Company and is
based on existing law as contained in the Code, amended United States
Treasury Regulations ("Treasury Regulations"), administrative rulings and
court decisions as of the date of this Registration Statement. No assurance
can be given that future legislative enactments, administrative rulings or
court decisions will not modify the legal basis for statements contained in
<PAGE> 59
this discussion. Any such development may be applied retroactively to
transactions completed prior to the date thereof, and could contain
provisions having an adverse affect upon the Company and the holders of the
Common Stock. In addition, several of the issues dealt with in this summary
are the subjects of proposed and temporary Treasury Regulations. No
assurance can be given that these regulations will be finally adopted in
their present form.
DESCRIPTION OF PROPERTY
Our corporate headquarters are located at 12730 New Brittany Boulevard, Ft.
Myers, Florida 33907, (941) 274-9355. Our transfer agent is Nadeau &
Simmons, P.C., 1250 Turks Head Building, Providence, Rhode Island 02903
(401) 272-5800.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Other than their employment agreements with the Company (refer to
"Management-Employment Contracts" above), no material transactions
involving the directors, senior officers or principal holders of the
Company's securities have occurred since the Company was incorporated
except for several loans previously made to the Company by the Company's
principals.
EXECUTIVE COMPENSATION
The following executive compensation was paid for the period ended March
31, 2000, to our company's directors, officers or affiliates or other
persons who were executive officers of the company as at March 31, 2000.
<PAGE> 60
</TABLE>
<TABLE>
<CAPTION>
Long Term Compensation
-----------------------------------
Annual Compensation
Compensation Awards
------------------------------------------
------------------- ------------ ----------------- ------------- ----------
Securities
Name and Principal Other Annual Underlying All Other
Position Salary Compensation Options/(1)/ Compensation
($) ($) (#) ($)
------------ -------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
Henry Stevens N/A
12730
New Brittany Blvd.
Ft. Myers, Florida
33907
President and
Director
Bryan Wade N/A
12799
New Brittany Blvd.
Ft. Myers, Florida
33907
Vice President and
Secretary
</TABLE>
____________________________
DIRECTOR COMPENSATION
Our company does not reimburse directors for expenses incurred, if any, in
attending meetings of the board of directors and does not pay director fees
to directors for their service on the board.
STOCK OPTION PLAN
Our company maintains a stock option plan (the "Stock Option Plan")
designed to provide incentives to directors, executive officers and
employees of our company or its subsidiaries and companies wholly owned by
these individuals in order to permit those persons to participate in the
growth and success of our company.
Under the terms of our Stock Option Plan, our company is authorized to set
aside as options a maximum of 2,000,000 of the common shares outstanding
from time to time, for the benefit of directors, officers and full time
<PAGE> 61
employees of our company or its subsidiaries and companies wholly owned by
these individuals. The Stock Option Plan does not permit any one
individual to hold as options more than 5% of the common shares outstanding
from time to time.
Any options so granted will be exercisable at the exercise price and for
such period of time as may be determined by the board of directors and
approved pursuant to the requirements of the applicable stock exchange, or
if our securities are not listed on a stock exchange, then in accordance
with the conditions established by the board of directors.
Any stock options will be non-transferable and terminate on the earlier of
the expiration date or the 30th day following the day on which the
director, officer or employee, as the case may be, ceases to be either a
director, officer or employee of our company or any of its subsidiaries.
INDEBTEDNESS OF DIRECTORS AND SENIOR OFFICERS AND PROMOTERS
No director, senior officer, promoter or other member of management or
their respective associates or affiliates have been indebted to our company
at any time during the period ended March 31, 2000 or since that date.
<PAGE> F-1
PVAXX CORPORATION
FINANCIAL STATEMENTS
PVAXX CORPORATION & SUBSIDIARIES
(DEVELOPMENT STAGE COMPANIES)
FINANCIAL STATEMENTS
March 31, 2000
The following financial statements include a balance sheet as of March 31,
2000, and a statement of operations and deficit accumulated during
development stage, a statement of changes in stockholders' equity and a
statement of cash flows for the period from March 31, 1999 (inception)
through March 31, 2000.
PVAXX CORPORATION & SUBSIDIARIES
Index to Financial Statements 1
Report of Independent Auditor 2
Balance Sheet (EXHIBIT 1) 3
Statement of Operations & Deficit Accumulated
During Development Stage (EXHIBIT 2) 4
Statement of Changes in Stockholders' Equity (EXHIBIT 3) 5
Statement of Cash Flows (EXHIBIT 4) 6
Notes to Financial Statements 7
<PAGE> F-2
August 4, 2000
Shareholders and Board of Directors
PVAXX CORPORATION
Fort Myers, Florida
REPORT OF INDEPENDENT AUDITOR
We have audited the accompanying balance sheet of PVAXX Corporation &
Subsidiaries (development stage companies) as of March 31, 2000, and the
related statements of operations and deficit accumulated during development
stage, changes in stockholders' equity, and cash flows for the period from
March 31, 1999 (inception of the first subsidiary to be formed) through
March 31, 2000. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of PVAXX Corporation &
Subsidiaries as of March 31, 2000, the results of development stage
activities, and its cash flows for the period ended March 31, 2000 in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
company will develop into a going concern. As discussed in Note #1 to the
financial statements, the Company and all of its subsidiaries are in a
development stage, and have yet to realize any revenue. The question of
substantial doubt about the company's ability to achieve going concern
status and management's plan in regard to these matters are discussed in
Note # 10 The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
<PAGE> F-3
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 0
Restricted cash and cash equivalents (Note 6) 299,970
Other receivable 6,666
VAT tax refund receivable 1,303
Property and equipment, net of accumulated depreciation 11,710
Total current assets $ 319,649
OTHER ASSETS:
Patent rights (Note 1) $ 68,018
Goodwill, net of accumulated amortization 233,764
Total other assets 301,782
Total assets $ 621,431
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts Payable $ 0
Current portion of long-term liabilties 2,542
Other accrued liabilities 16,837
Total current liabilities $ 19,379
LONG TERM LIABILITIES:
Notes payable $ 5,691
Notes payable to related parties 456,542
Loans payable to Officers/Directors 49,133
Total long term liabilities $ 511,366
Total liabilities $ 530,745
EQUITY: (Exhibit 3)
Common stock - par value $.01;
40,000,000 shares authorized
20,000,000 shares issued, of which
42,832 are being held as treasury stock $ 200,000
Paid in Capital
Preferred stock - par value $.01;
10,000,000 shares authorized,
issued and outstanding 100,000
Treasury stock (149,906)
Retained earnings (59,408)
Total equity 90,686
Total liabilities and equity $ 621,431
<PAGE> F-4
STATEMENT OF OPERATIONS AND DEFICIT
ACCUMULATED DURING DEVELOPMENT STAGE
From March 31,1999 (Inception) thru March 31, 2000
REVENUE $ 0
COST OF REVENUE
Direct costs 0
Gross profit $ 0
OPERATING EXPENSES
Development costs $ 17,638
Finance costs 11,536
Administrative costs 30,234
Total operating expenses 59,408
Operating income (loss) $ (59,408)
OTHER INCOME AND (EXPENSES) 0
Net Operating Income (Loss) $ (59,408)
INCOME TAXES 0
Net Income (Loss) after Income Tax $ (59,408)
PER SHARE INFORMATION
Weighted average number of
common shares outstanding 19,957,168
Profit (loss) per share $ (0)
Fully diluted shares 29,957,168
Profit (loss) per fully diluted share $ (0)
<PAGE> F-5
STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
From March 31, 1999 (Inception) thru March 31, 2000
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Shares Issued
Common Pref. Common Pref. Treas. Paid-in Retained
Stock Stock Stock Stock Stock Capital Earnings Equity
Equity at
Inception $ 0
Acquisition of
subsidiary
corporations 0
Issuance of
common stock 20,000,000 $200,000 200,000
Issuance of
preferred
stock 10,000,000 $100,000 100,000
Repurchase of
common stock
for resale (42,832) $(149,906) (149,906)
0
Net loss for
the period 0 0 0 0 0 0 $(59,408) (59,408)
Total 19,957,168 10,000,000 $200,000 $100,000 $(149,906) $0 $(59,408) $90,686
(Exhibit 1)
</TABLE>
<PAGE> F-6
STATEMENT OF CASH FLOWS
From March 31, 1999 (Inception) thru March 31, 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (59,408)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation $ 1,065
(Increase) in VAT tax refund receivable (1,303)
Increase in accrued liabilities 15,054
Increase in loans to Officers/Directors 49,133 63,949
Net cash provided by (used in) operating activities $ 4,541
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase/investment of intangible patent 0
Purchase of equipment and improvements (12,775)
Net cash provided by (used in) investing activities $ (12,775)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes & loans payable $ 8,783
Repayments of notes & loans payable (549)
Proceeds from issuance of common stock 0
Proceeds from issuance of preferred stock 0
Net cash provided by (used in) financing activities 8,234
Increase in Cash and Cash Equivalents 0
Cash at beginning of period 0
Cash at end of period $ 0
<PAGE> F-7
PVAXX CORPORATION & SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2000
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF DEVELOPMENT STAGE ACTIVITIES
PVAXX Corporation, is a 'start-up' entity formed in Florida in March, 2000.
With its primary office in Fort Myers, Florida and an office located in
Kemble, England, the residence of the majority shareholder, the only
activities to date have been organizational activities.
The Company acquired certain business assets from the PVAXX Business Group
for the issuance of 10,000,000 shares of Preferred stock and 20,000,000
shares of Common stock, each with a par value of $ .01. The PVAXX Business
Group was owned and controlled by the Company's President and Chairman of
the Board of Directors, Henry Stevens, and consisted of two development
stage United Kingdom corporations; Jumik Technologies, Ltd., which was
incorporated on March 31, 1999 and changed its name on March 22, 2000 to
PVAXX Technologies, Ltd., and PVAXX Research and Development Centre Ltd.,
(changed on May 22, 2000 to PVAXX Research & Development, Ltd.)
incorporated on October 18, 1999. The Company (PVAXX Corporation)
subsequently formed another subsidiary corporation, PVAXX Europe, Ltd. on
March 31, 2000, which is also in the development stage.
The primary business of the Company is the development of a biodegradable
polymer, which because of its lack of undesirable environmental affects, is
deemed to be useful in a variety of commercial, industrial and consumer
applications. The role of each of the subsidiary companies is as follows:
a) PVAXX Technologies, Ltd. is the holder of the rights to patents
published under international Publication Numbers WO 98/26911 on June
25, 1998 and WO 00/12615 on March 9, 2000,
b) PVAXX Research and Development Ltd. performs research into product
improvements and applications. Doing business as PVAXX Engineering,
it produces machines for pelletizing the product for sale to
converters, and as PVAXX Pharmaceuticals it manufactures and sells
capsule making machinery.
c) PVAXX Europe Ltd. is intended to market and sell the products in
Europe.
Principles of Consolidation
The consolidated financial statements include the accounts of PVAXX
Corporation (parent corporation), and its 100% owned subsidiary corporations
(PVAXX Technologies, Ltd., PVAXX Research & Development, Ltd. and
PVAXX Europe, Ltd.). After conversion of UK currency to US dollars, all
significant inter-company accounts and transactions have been eliminated
<PAGE>
USE OF ESTIMATES
The process of preparing financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reporting of amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period.
CASH AND CASH EQUIVALENTS
Highly liquid assets with a maturity date of three (3) months or less from
the date of acquisition are treated as cash or cash equivalents.
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost less accumulated depreciation.
Depreciation is computed using the straight-line and accelerated methods
over estimated useful lives of the property.
The amortization of leasehold improvements will be based on the shorter of
the lease term or the life of the improvement. Betterments and large
renewals which would extend the life of an asset will be capitalized
whereas maintenance and repairs and small renewals will be expensed as
incurred.
Intangibles
Intangible assets such as patents on other intellectual property are
recorded at cost if it is determinable at the date of acquisition. Such
intangible assets will be amortized over estimated useful lives based on
the nature of the item.
Intangibles representing acquisition costs in excess of the fair value of
net tangible assets of businesses purchased consist primarily of the value
of intellectual property above its cost and of ongoing client relationships
and goodwill. The value of these assets may be established by management
through supporting information such as concurrent sales of stock to
unrelated parties at prices consistent with the recognition of such
valuation. These assets are being amortized over periods ranging from
three to thirty years on a straight-line basis. Intangibles are evaluated
for impairment when events or changes in circumstances indicate that the
carrying amounts of the assets may not be recoverable through the estimated
undiscounted future cash flows resulting from the use of these assets.
When any such impairment exists, the related assets will be written down to
fair value.
INCOME TAXES
The Company uses the asset and liability method as identified in SFAS 109,
Accounting for Income Taxes.
<PAGE>
The consolidated Company has a net operating loss carryforward to future
periods of ($59,408) which would result in a tax debit based on application
of appropriate UK and US tax rates if offsetting profits were anticipated.
The loss carryforward resulted from loss generated during the period ended
March 31, 2000. For financial statement purposes a valuation adjustment
completely offsets the deferred tax asset related to the net operating loss
carryforward. Because the Company and its subsidiaries are in the
development stages, there is no assurance that future operations will
generate a profit or income.
NOTE 2 - ACCOUNTS RECEIVABLE
Management believes all receivables are due and collectible and no reserve
for un-collectable amounts is necessary.
NOTE 3 - RELATED PARTY TRANSACTIONS
The Company acquired the PVAXX Business Group from a company owned and
controlled by Henry Stevens, the present majority owner of PVAXX
Corporation. Consideration for the transaction, valued at $300,000, was
the issuance of 10,000,000 shares of Preferred stock and 20,000,000 shares
of Common stock. The PVAXX Business Group consists of two subsidiary
companies described in Note 1.
During March, the Company repurchased 134,832 shares of common stock for a
price of $456,542 from its principal stockholder. During March, 90,000
shares were sold for $299,970 subject to an escrow agreement and a
restricted cash balance (see note disclosure herein referred to "Restricted
Cash'), and 2000 shares were sold for $6,660. The remaining shares were
sold during May 2000 for $149,906.
The President, and principal shareholder, advanced to the Company $49,133
on a short-term basis with no interest.
The patent rights owned by PVAXX Technologies, Ltd. were developed by and
acquired for a company owned by the President, Henry Stevens.
The Company entered into an Employment Agreement dated March 20, 2000 with
Henry Stevens, the Company's President and Chairman of the Board of
Directors. The Agreement is for a term of five years and renewable by the
Company.
Under the Agreement, the Company agrees to pay the following amounts:
* $50,000 per month net of all taxes;
* Use of a motor vehicle at the choice of the employee;
* Use of residential facilities in the Fort Myers area at a rental not
to exceed $36,000 per annum; and
<PAGE>
* The Company shall establish a performance related share option
scheme, in which the company's board of directors will determine
participation commensurate with the employee's position.
No payments have been made under the Agreement as of the date of the
financial statements.
NOTE 4 - RISKS AND UNCERTAINTIES
The Company's future operating results may be affected by a number of
factors. The ability of the Company to raise the capital necessary to
continue to develop and bring its products to market is not assured.
Estimates of the size of the market, and the company's eventual market
share may not be realized, and the effect of competition on selling prices
cannot be determined.
NOTE 5 - COMMITMENTS AND CONTINGENT LIABILITIES
Leased Facilities
The Company has entered into a three (3) year lease of facilities in the
Fort Myers area effective June 1, 2000. Under the terms of the lease, the
Company is obligated for monthly based rental amounts plus sales tax and
Common Area Maintenance (CAM) charges. Under the terms of the lease, the
Company is obligated to keep and maintain the leased premises, including
fixtures and improvements, in good condition.
The Company is obligated for the following rent payments over the lease
term:
<TABLE>
<CAPTION>
TOTAL MONTHLY SALES
RENT BASE RENT CAM TAX
<S> <C> <C> <C> <C>
Year 1
1st quarter $11,013 $2,000 $1,463 $208
2nd quarter 11,013 2,000 1,463 208
3rd quarter 12,285 2,400 1,463 232
4th quarter 13,239 2,700 1,463 250
Year 2 55,080 2,808 1,522 260
Year 3 57,276 2,920 1,583 270
</TABLE>
EMPLOYEE COMPENSATION
In addition to the employment contract with the President, disclosed in
Note 3, and arrangement with the Vice-president provides for a salary of
$10,000 monthly for one year, and $15,000 thereafter.
<PAGE> 72
NOTE 6 - RESTRICTED CASH
On March 3, 2000, an unrelated individual transferred $299,970 to an escrow
agent in exchange for 90,000 shares of common stock. Under the terms of
the escrow agreement, updated and signed on August 4, 2000, the funds will
be released to the company when shares of the Company are tradable on a
U.S. national exchange at not less than $5.00 per share. If this is not
achieved, the funds may be released to the investor six (6) months after
the effective date of the agreement, upon return of the 90,000 shares.
NOTE 7 - FAIR VALUES OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value
of financial instruments:
Cash and Cash Equivalents are carried at face value in US dollar
denominations, or at exchange rates effective on balance sheet date.
Accounts Receivable and Accounts Payable are carried at face value, subject
to reserves, which may be established upon review.
NOTE 8 - EARNINGS PER SHARE
Basic earnings per share are computed by dividing earnings available to
common stockholders by the weighted average number of common shares
outstanding during the period. Diluted earnings per share reflect per
share amounts that would have resulted if all preferred stock had been
converted to common stock. The following reflects amounts reported in the
financial statements:
<TABLE>
<CAPTION>
For the Period Ended March 31, 2000
Income Shares Per-share
(Numerator) (Denominator) Amount
<S> <C> <C> <C>
Income available to common stockholders
- basic earnings per share (59,408) 19,957,168 .003
Effect of dilutive securities
- convertible preferred stock 10,000,000
Income available to common stockholders
- diluted earnings per share (59,408) 29,957,168 .002
</TABLE>
NOTE 9 - SUBSEQUENT EVENT
On July 11, 2000 the company transacted a "reverse" merger with Oak Brook
Capital IV, Inc., which is registered with the Securities and Exchange
Commission as a "shell" company whose purpose is to acquire a company with
operations and in need of access to public capital markets. Shares of
common and preferred stock were exchanged on a one-for-one basis.
<PAGE> 73
NOTE 10 - GOING CONCERN CONSIDERATIONS
The Company's management is addressing its ability to emerge from the
development stage and to become a going concern by continuing to develop,
refine, and market its processes and products.
Although as of the balance sheet date of March 31, 2000, the Company had
not entered into any revenue-producing contracts, management expects to
have successfully negotiated several of these before the end of this fiscal
year. Furthermore, as described in Note #9, the Company's acquisition of,
and merger with, a registered "shell" company is expected to provide
additional financial resources.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Not applicable.
LEGAL MATTERS
The validity of our common stock offered hereby has been passed upon for us
by Nadeau & Simmons, P.C., 1250 Turks Head Building, Providence, Rhode
Island.
EXPERTS
Bersch Accounting, sc, independent auditors, have audited the financial
statements of our company included for the year ended March 31, 2000, which
are included in this prospectus and registration statement. These financial
statements are given on their authority as experts in accounting and
auditing.
ADDITIONAL INFORMATION
We have filed with the Commission a registration statement on Form SB-2
under the Securities Act, with respect to the shares of common stock
offered hereby. This prospectus constitutes a part of the Registration
Statement and does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted from this
prospectus as permitted by the rules and regulations of the Commission.
Statements contained in this prospectus as to the contents of any contract,
agreement or other document referred to herein are not necessarily complete
and, where such agreement or other document is an exhibit to the
registration statement, each such statement is qualified in all respects by
<PAGE> 74
the provisions of such exhibit, to which reference is hereby made for a
full statement of the provisions thereof. For further information with
respect to our company and its common stock, reference is hereby made to
the registration statement and to the exhibits thereto.
The registration statement and the exhibits may be inspected, without
charge, and copies may be obtained, at prescribed rates, at the public
reference facilities of the Commission maintained at Judiciary Plaza, 450
Fifth Street, N.W., room 1024, Washington, DC 20549, or on the Internet at
http://www.sec.gov. Copies of the Registration Statement and the exhibits
may also be inspected, without charge, at the Commission's regional offices
at 7 World Trade Center, Suite 1300, New York, New York 10048, and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. In addition, copies of
the Registration Statement and the exhibits may be obtained by mail, at
prescribed rates, from the Public Reference Branch of the Commission at 450
Fifth Street, N.W., Washington, DC 20549.
<PAGE> 75
In connection with this offering, our company continues to be subject to
the information and periodic reporting requirements of the Exchange Act,
and, in accordance therewith, will file periodic reports, proxy statements
and other information with the Commission. Such periodic reports, proxy
statements and other information will be available for inspection and
copying at the public reference facilities and regional offices referred to
above. We intend to furnish our shareholders with annual reports containing
audited financial statements certified by independent public accountants
and with quarterly reports containing unaudited financial statements for
the first three quarters of each fiscal year.
The information contained in this prospectus is subject to completion or
amendment. The shares described in this prospectus may not be sold, nor
may offers to buy be accepted, prior to the time this registration
statement becomes effective. This prospectus shall not constitute an offer
to sell or the solicitation of an offer to buy, nor shall there be any sale
of these securities in any state in which such offer, solicitation or sale
would be unlawful, prior to registration under the securities laws of any
such state.
We will amend this registration statement on such date or dates as may be
necessary to delay its effective date until we shall file a further
amendment which specifically states that this registration statement shall
become effective in accordance with Section 8(A) of the Securities Act of
1933 or until the registration statement shall become effective on such
date as the Commission, acting pursuant to said Section 8(a), may
determine.
Subject to Completion Dated ______________, 2000
PVAXX CORPORATION
23,722,800 shares
Common Stock
This prospectus relates to up to 23,722,800 shares of common stock, no par
value of PVAXX Corporation. Our corporate address is 12730 New Brittany
Blvd., Ft. Myers, Florida 33907. All of the shares offered are to be sold
for the accounts of selling shareholders of our Company. We will not
receive any of the proceeds from the sale of the shares by our selling
shareholders. We estimate that total expenses will be approximately
$75,000 in connection with this offering of our shares.
We are subject to the reporting requirements of Section 13 and 15(d) of the
Exchange Act and are presently current in filing reports with the
Securities and Exchange Commission. Investments in our shares involve a
high degree of risk (see ARisk Factors@). The shares have not been
approved or disapproved by the Securities and Exchange Commission nor has
the Commission passed upon the accuracy or adequacy of this prospectus.
Any representation to the contrary is a criminal offense.
<PAGE> 76
TABLE OF CONTENTS
<TABLE>
<S> <C>
Prospectus Summary
Risk Factors
Year 2000 Problems May Have an Adverse Effect
Competition
Potential Fluctuations in Quarterly Operating Results
Limited Operating History
Dependence on Third-Party Suppliers
Patents, Trademarks and Proprietary Information
Rapid Technological Changes
Expansion
Government Regulation
Dependence on Key Personnel
Control by Principal Shareholders, Officers and Directors
Issuance of Preferred Stock
Trading Market; Volatility of Stock Price
Possible Need for Additional Financing
Indemnification of Officers and Directors
Dependence Upon Outside Advisors
Rule 144 Sales
Use of Proceeds
Dilution
Dividend Policy
Business
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Management
Certain Transactions
Principal Shareholders
Description of Capital Stock
Plan of Distribution
Legal Matters
Experts
Additional Information
Financial Statements F-1
</TABLE>
-------------------------------
<PAGE> 77
UNTIL ____________________, 2000 (45 DAYS AFTER THE DATE OF THIS
PROSPECTUS) ALL DEALERS EFFECTING TRANSACTIONS IN THE SHARES OF
COMMON STOCK OFFERED HEREUNDER MAY BE REQUIRED TO DELIVER A
PROSPECTUS.
====================================================================
====================================================================
PVAXX CORPORATION
---------------------------------
23,722,800 shares
---------------------------------
Common Stock
---------------------------------
PROSPECTUS
---------------------------------
August __, 2000
<PAGE> 78
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Model Business Corporation Act of the State of Colorado ("CMBCA")
provides, in general, that a corporation shall have the power to indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in
the right of the corporation), because the person is or was a director or
officer of the corporation. Such indemnity may be against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by the person in connection
with such action, suit or proceeding, if the person acted in good faith and
in a manner the person reasonably believed to be in or not opposed to the
best interests of the corporation and if, with respect to any criminal
action or proceeding, the person did not have reasonable cause to believe
the person's conduct was unlawful.
The CMBCA provides, in general, that a corporation shall have the power to
indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the
right of the corporation to procure a judgment in its favor because the
person is or was a director or officer of the corporation, against any
expenses (including attorneys' fees) actually and reasonably incurred by
the person in connection with the defense or settlement of such action or
suit if the person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interests of the
corporation.
The CMBCA provides, in general, that a corporation shall have the power to
purchase and maintain insurance on behalf of any person who is or was a
director or officer of the corporation against any liability asserted
against the person in any such capacity, or arising out of the person's
status as such, whether or not the corporation would have the power to
indemnify the person against such liability under the provisions of the
law.
The Company's Articles of Incorporation (incorporated by reference herein)
provides for indemnification of directors, officers and other persons as
follows:
<PAGE> 79
To the fullest extent permitted by the CMBCA as the same now exists or may
hereafter be amended, the Corporation shall indemnify, and advance expenses
to, its directors and officers and any person who is or was serving at the
request of the Corporation as a director or officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise.
The Corporation, by action of its board of directors, may provide
indemnification or advance expenses to employees and agents of the
Corporation or other persons only on such terms and conditions and to the
extent determined by the board of directors in its sole and absolute
discretion.
The indemnification and advancement of expenses shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any By-law, agreement, vote
of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding
such office.
The Corporation shall have the power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation would
have the power to indemnify him against such liability.
The indemnification and advancement of expenses, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
director or officer and shall inure to the benefit of the heirs, executors
and administrators of such officer or director. The indemnification and
advancement of expenses that may have been provided to an employee or agent
of the Corporation by action of the board of directors, shall, unless
otherwise provided when authorized or ratified, continue as to a person who
has ceased to be an employee or agent of the Corporation and shall inure to
the benefit of the heirs, executors and administrators of such a person,
after the time such person has ceased to be an employee or agent of the
Corporation, only on such terms and conditions and to the extent determined
by the board of directors in its sole discretion.
THE COMPANY'S BY-LAWS (INCORPORATED BY REFERENCE HEREIN) PROVIDES THAT:
Right to Indemnification. Each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in any action,
suit or proceeding, whether civil, criminal, administrative or
investigative, because he is or was a director or an officer of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including service
with respect to an employee benefit plan (hereinafter an "Indemnitee"),
whether the basis of such
<PAGE> 80
proceeding is alleged action in an official capacity as a director,
officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held
harmless by the Corporation to the fullest extent authorized by the CMBCA,
as the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights
than such law permitted the Corporation to provide before such amendment),
against all expense, liability and loss (including attorney's fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement) reasonably incurred or suffered by such Indemnitee in
connection therewith; provided, however, that, except as provided in the
section "Right of Indemnitees to Bring Suit" with respect to proceedings to
enforce rights to indemnification, the Corporation shall indemnify any such
Indemnitee in connection with a proceeding (or part thereof) initiated by
such Indemnitee only if such proceeding (or part thereof) was authorized by
the board of directors of the Corporation.
RIGHT TO ADVANCEMENT OF EXPENSES. The right to indemnification conferred
in the section "Right to Indemnification" of this Article shall include the
right to be paid by the Corporation the expenses (including attorney's
fees) incurred in defending any such proceeding in advance of its final
disposition; provided, however, that, if the CMBCA requires, an advancement
of expenses incurred by an Indemnitee in his capacity as a director or
officer (and not in any other capacity in which service was or is rendered
by such Indemnitee, including, without limitation, service to an employee
benefit plan) shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such Indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision
from which there is no further right to appeal that such Indemnitee is not
entitled to be indemnified for such expenses under this section or
otherwise.
The rights to indemnification and to the advancement of expenses conferred
in this section and the section "Right to Indemnification" of this Article
shall be contract rights and such rights shall continue as to an Indemnitee who
has ceased to be a director, officer, employee or agent and shall inure to the
benefit of the Indemnitee's heirs, executors and administrators. Any repeal
or modification of any of the provisions of this Article shall not adversely
affect any right or protection of an Indemnitee existing at the time of such
repeal or modification.
RIGHT OF INDEMNITEES TO BRING SUIT. If a claim under the section "Right to
Indemnification" or "Right to Advancement of Expenses" of this Article is
not paid in full by the Corporation within sixty (60) days after a written
claim has been received by the Corporation, except in the case of a claim
for an advancement of expenses, in which case the applicable period shall
be twenty (20) days, the Indemnitee may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim. If
successful in whole or in part in any such suit, or in a suit brought by
the Corporation to recover an advancement of expenses pursuant to the terms
of an undertaking, the Indemnitee shall also be entitled to be paid the
expenses of prosecuting or defending such suit. In (1) any suit brought by
the Indemnitee to enforce a right to indemnification hereunder (but not in
a suit brought by the Indemnitee to enforce a right to an advancement of
expenses) it shall be a defense that, and (2) in any suit brought by the
Corporation to recover an advancement of expenses pursuant to the terms of
an undertaking, the Corporation shall be entitled to recover such expenses upon
a final adjudication that, the Indemnitee has not met any applicable standard
for indemnification set forth in the CMBCA.
<PAGE> 81
Neither the failure of the Corporation (including its board of directors,
independent legal counsel, or its stockholders) to have made a determination
prior to the commencement of such suit that indemnification of the Indemnitee is
proper in the circumstances because the Indemnitee has met the applicable
standard of conduct set forth in the CMBCA, nor an actual determination by the
Corporation (including its board of directors, independent legal counsel,or its
stockholders) that the Indemnitee has not met such applicable standard of
conduct, shall create a presumption that the Indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by the
Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to
enforce a right to indemnification or to an advancement of expenses hereunder,
or brought by the Corporation to recover an advancement of expenses pursuant to
the terms of an undertaking, the burden of proving that the Indemnitee is not
entitled to be indemnified, or to such advancement of expenses, under this
Article or otherwise shall be on the Corporation.
NON-EXCLUSIVITY OF RIGHTS. The rights to indemnification and to the
advancement of expenses conferred in this Article shall not be exclusive of
any other right which any person may have or hereafter acquire under any
statute, the Corporation's Articles of Incorporation as amended from time
to time, these By-Laws, any agreement, any vote of stockholders or
disinterested directors or otherwise.
INSURANCE. The Corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or
other enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such
expense, liability or loss under the CMBCA.
INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION. The
Corporation may, to the extent authorized from time to time by the board of
directors, grant rights to indemnification and to the advancement of
expenses to any employee or agent of the Corporation to the fullest extent
of the provisions of this Article with respect to the indemnification and
advancement of expenses of directors and officers of the Corporation.
The directors and officers of our company are covered by a policy of
liability insurance.
<PAGE> 82
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the sale of the Shares are estimated as
follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee $ 2,350
Legal Fees and expenses 25,870
Accounting fees and expenses 33,000
Printing and Engraving 10,000
Miscellaneous 4,880
----------
TOTAL $ 75,000
</TABLE>
ITEM 26. UNREGISTERED SECURITIES ISSUED OR SOLD WITHIN ONE YEAR.
Oak Brook Capital IV, Inc. ("Oak Brook") was incorporated under the laws of
the State of Colorado on May 15, 1998. It was incorporated as a "blind
pool" or "blank check" company for the purpose of seeking to acquire one or
more properties or businesses. Oak Brook elected to voluntarily file a
registration statement in order to become a reporting company under the
Securities Exchange Act of 1934, as amended (the "34 Act").
A Plan and Agreement of Share Exchange was executed on May 19, by and among
OAK BROOK, PVAXX, Mark T. Thatcher and Gerard M. Werner, who joined in the
execution of the Agreement for the purpose of making certain covenants
regarding the transaction contemplated therein. OAK BROOK is a corporation
duly organized and validly existing under the laws of the state of
Colorado, with its registered office at 17 West Cheyenne Mountain Blvd.,
Colorado Springs, Colorado 80906, its principal executive office at 1250
Turks Head Building, and its phone number is (401) 272-5800; PVAXX is a
corporation duly organized and validly existing under the laws of the state
of Florida, with its registered office located in the city of Ft. Myers,
State of Florida, its principal executive office at 12730 New Brittany
Boulevard, Ft. Myers, FL 33907, and its phone number is (941)274-9355; and
Mark T. Thatcher is the Chairman and Secretary and Gerard M. Werner is the
President and a Director of OAK BROOK.
<PAGE> 83
The respective boards of directors of OAK BROOK and PVAXX deemed it
desirable and in the best interests of their respective corporations, for
OAK BROOK to acquire the outstanding capital stock of PVAXX in exchange for
the issuance of shares of the common and preferred stock of OAK BROOK and
proposed, declared advisable and approved such share exchange (the "PVAXX
EXCHANGE") pursuant to this Agreement, which Agreement has been duly
approved by resolutions of the respective boards of directors and a vote by
the shareholders of OAK BROOK and PVAXX.
APPROVAL OF PLAN AND AGREEMENT OF SHARE EXCHANGE
The Board of Directors and shareholders have unanimously approved a Plan
and Agreement of Share Exchange (the "Exchange"), whereby OAK BROOK
acquired all of the issued and outstanding capital stock of PVAXX in
exchange for 20,000,000 shares of the Common stock of OAK BROOK and
10,000,000 shares of the Preferred Stock of OAK BROOK.
CONVERSION OF PVAXX'S STOCK AND OTHER SECURITIES:
PVAXX shareholders surrendered one hundred percent (100%) of their issued
and outstanding common and preferred shares to OAK BROOK in exchange for
receipt of one hundred percent (100%) of PVAXX shares, OAK BROOK, on the
terms and subject to the conditions herein set forth, issued and delivered
to PVAXX shareholders:
(i) Issuance of Shares and Options in connection with the PVAXX
Exchange. The aggregate number of OAK BROOK Shares of common
stock to be issued or reserved for issuance in connection with
the PVAXX Exchange shall be twenty million (20,000,000) As
soon as practicable after the PVAXX Exchange became effective,
OAK BROOK caused its transfer agent (the "Transfer Agent")
to issue to the shareholders of OAK BROOK, on a pro rata basis,
an aggregate of twenty million (20,000,000) Shares of OAK BROOK
common stock in exchange for all the existing shares of PVAXX
common stock.
The calculation of pro rata distributions for the purposes of
this section shall be made by dividing the aggregate number of
OAK BROOK Shares of common stock to be issued or reserved for
issuance in connection with the PVAXX Exchange by the aggregate
number of PVAXX Shares of common stock issued or reserved as
a result of options, warrants, convertible securities or other
commitments. No other issuance of securities is required to
effect the PVAXX Exchange.
<PAGE> 84
(ii) Fractional Interests. No fractional shares of common stock
of OAK BROOK or certificate or script representing the same was
Issued. In lieu thereof each holder of PVAXX Shares or PVAXX
Options having a fractional interest arising upon such conversion
was rounded up into one full additional share of OAK BROOK common
stock;
(iii) Status of Common Stock. All Shares of common stock of OAK
BROOK into which PVAXX Shares were converted as herein provided
were fully paid and non-assessable and issued in full satisfaction
of all rights pertaining to such Shares;
The PVAXX Exchange was intended to qualify as an I.R.C. 368(b)
tax-free reorganization. At the Closing, (a) PVAXX delivered
to OAK BROOK a statement (in such form as may be reasonably
requested by counsel to OAK BROOK) conforming to the requirements
of Section 1.897-2(h)(1)(i) of the United States Treasury
Regulations, and (b) PVAXX shall deliver to the IRS the notification
required under Section 1.897 - 2(h)(2) of the United States Treasury
Regulations.
ITEM 27. EXHIBITS.
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
<S> <C> <C>
x 2.10 Plan of Share Exchange dated May 19, 2000;
x 2.11 Articles of Share Exchange between Oak Brook Capital IV,
Inc.
and PVAXX Corporation, dated June 26, 2000;
# 3(a) Articles of Incorporation
# 3(b) Bylaws
<PAGE> 85
EXHIBIT NO DESCRIPTION
# 4(a) Agreements Defining Certain Rights of Shareholders
# 4(b) Specimen Stock Certificate
x 5.1 Opinion of Nadeau & Simmons, P.C. regarding the legality
of the securities being offered hereby.
7 Not applicable
9 Not applicable
x 10.1 Issuance of Restricted Shares from Authorized Shares
x 10.2 Opinion to Transfer Agent Authorizing Issuance of
Restricted Shares from Authorized Shares
11 Not applicable
14 Not applicable
16 Not applicable
x 20.1 Board of Director's Resolution's authorizing merger and
name change from Oak Brook Capital IV, Inc. to PVAXX
Corporation;
21 Not applicable
x 23.1 Consent of Counsel
(contained in Exhibit 5.1)
x 24.1 Consent of Dennis W. Bersch, CPA.
x 27 Financial Data Schedule
28 Not applicable
# 99.1 Safe Harbor Compliance Statement
<PAGE> 86
____________________________
x incorporated herein by reference from Registrant=s Amendment
to Form 8-K, filed July 10, 2000
# incorporated herein by reference from Registrant's Third
Amendment to Form 10SB12G, filed August 5, 1999.
ITEM 28. UNDERTAKINGS.
The undersigned hereby undertakes:
(1) that, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in this registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof;
(2) that before any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), the issuer undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items
of the applicable form;
(3) that every prospectus (i) that is filed pursuant to paragraph (2)
immediately preceding, or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an amendment to
the registration statement and will not be used until such amendment is
effective, and that, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof;
(4) to respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this
Form SB-2 under the Securities Act of 1933, within one business day of
receipt of any such request, and to send the incorporated documents by
first class mail or other equally prompt means, including information
contained in documents filed after the effective date of the registration
statement through the date of responding to such request; and
<PAGE> 87
(5) to supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration statement when
it became effective.
Insofar as indemnification for liabilities under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 20 above, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.
If a claim of indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in a successful defense of
any action, suit or proceeding) is asserted by such director, officer, or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by
the undersigned hereunto duly authorized.
PVAXX CORPORATION
By: /s/ Henry Stevens
________________________________
HENRY STEVENS
Chairman
Date: August 7, 2000
<PAGE> 88
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Henry Stevens, his true and lawful
attorneys-in-fact and agents with full power of substitution and
re-substitution, for then and in their name, place and stead, in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement and to file the same with all
exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done, as fully
to all intents and purposes as they might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any
of them, or their or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
This power of attorney may be executed in counterparts.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
</TABLE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
----------------- ---------------- -----------------
<S> <C> <C>
/s/ Bryan Wade Secretary August 7, 2000
</TABLE>
